The person who ventures into opening a real estate business will need to have certain related experience, abilities and qualifications. It will be the entrepreneurial type of person with a strong drive for success and a high tolerance of risk who will eventually be the successful operator.

The benefits of operating a real estate business are very rewarding. It offers the opportunity of above average financial earnings. Though strong discipline and hard work will be necessary, the financial gain should, after the initial start up period, be far more rewarding than working in a fixed salary environment.

A further benefit that the business owner has is the financial gain from the work of employee agents at the company. The business may venture in so many facets of the property business like sales in the single residential market, sectional titles, commercial units, and marketing of property developments. Business broking and commercial rentals could be combined as another branch of the business. Though it would be impossible for one person to be an expert in all these services, employee agents could be appointed who specializes in the different categories.

The more services the business has to offer, combined with proper farming in each category, the larger will the market penetration and brand awareness be, resulting in the gain of a larger market share. From the above it is clear that it will be to the benefit of the business operator when he has the needed skills to assist, develop, motivate and manage people to be effective in farming and closing business.

Without a proper knowledge of the property market or previous experience, it will be far too risky to start out an own venture. It would be better to first join an existing agency to gain some exposure.
The business operator should be very aware of the risk brought about by opening a real estate business. Risk could be described as an unforeseen outcome of an event. The importance of proper planning before venturing into a business could not be stressed enough.

A whole list of business risks could be mentioned. The first issue that comes to mind is if enough startup and operating capital is available. Another is that the new business might not be readily accepted in the market. This might result in a longer period than anticipated before profit in the business or even break even is reached. Then the new business might not be able to attract enough and capable employee agents, which might lead to low turnover levels and again financial doom.

To summarize the risk for the business owner, it all boils down to finances:
Will the new business make enough sales to service all its financial obligations and will the business owner be able to draw his personal financial needs from the business before the initial startup capital is depleted?

Considering the above it is a very debatable issue if it is feasible to establish or not to establish a real estate business. Only the person who has calculated the risk and who have access to enough personal financial reserves after provision for start up capital for a business should go this route. Most of the benefits of being an independent business owner could very well be gained from being an employee agent at a well established firm. Though the employee agent might experience the commission share with the company as high, it is my opinion that the risk of starting out on your own might weigh even higher.

Should I decide to venture into the residential market, I will make sure to have adequate financial reserves and will then take up a well branded franchise. My first consideration will be to take over an existing establishment before starting out from scratch. On the other hand, if I have the choice of starting over, I will again start as an independent in the market sector where I am active at the moment, namely partly commercial and partly residential, but focusing on investors and their needs.