How to reap big in the real estate sector with minimum investment

Wednesday, June 6 2012, www.ugandan-news.com

Becoming a successful real estate agent is a combination of investing time in education, (formal or otherwise), money, searching a broker who can help you get your first clients and becoming smart and aggressive. But that’s not all there is to the industry. There are some of the more overlooked aspects of the real estate business and a person with a small budget can stiil penetrate the industry.

The term real estate has been bandied around like it is the hottest cookie and only the rich can have a bite from. While it is true that you need money to start any business, you do not have to be overly rich to get into the real estate business. Beside the assumption about money, there is another that one needs land, lots of land, to be part of this business.

“I keep hearing that the real estate business is lucrative and I would really love to be part of it but I don’t have land so I don’t think I can really make any money from it,” Derek Ssuna, a currently unemployed 27-year-old says. This is a gentleman who has the interest in real estate. But because of the notion that you need capital to take part, he looks on as other people earn from it.

To Ssuna and anyone else who is of the same thought, the CEO of the Association of Real Estate Agents (AREA), Vincent Agaba, says that real estate has a side where people are the capital. This side is that of real estate agents and managers.

“With real estate agency and management, you do not need a lot of capital. So even someone who has just finished school but has knowledge on real estate can do it,” he says, “this can be a starting point for people who want to be in the real estate business. From here you can go into construction, real estate development or even mortgage finance.”

What it entails

Seeing as understanding the business is key, you have to first of all know what it is you are getting into. Real estate agency has two sides; the first is the one that deals with property agents and the other is management.

“If you have rentals and cannot keep a tab on things like plumbing, collecting rent and the like, then you may employ someone to deal with these issues. This person is the property manager,” Agaba explains. Such a person becomes a middleman between the property owner and the people renting it. The money you make in this instance comes from the rent you collect on behalf of your boss.

And then there are those who manage property by living on it. Robert Mulisa has “kept” land for several people in the last 17 years and he has earned from it while making temporary homes for his family.

“I started out by keeping land for my cousin. he had bought it but did not have a clear plan of what he wanted to do with it so he asked me to stay on it meanwhile,” he narrates, “the land was big and fertile so my wife grew some cassava and a few vegetables which she sold by the roadside.

When my cousin was ready to use the land we left with the money he had paid me for keeping the land for a year plus the one from the vegetables.” And because he had done such a good job, his cousin recommended him to a friend who had also bought land but did not want to use it just then.

Mulisa, by chance, found his niche in the real estate business. To this day he makes deals with land owners to stay on the land. The land owners benefit in a way that their land is kept away from squatters who tend to encroach on land that seems to have no owner and the owners of the land rest assured that their land is safe.

“When people ask me what I do, I tell them that I’m in the real estate business. I started out when I have no land or property to my name but out of managing people’s land, I managed to buy a small piece of land on which I am building a house,” Mulisa says with pride. To make sure he gets the best out of the deals he makes, Mulisa signs contracts with these land owners. So far he has had five such clients beside his cousin.

Apart from managing rentals or “keeping” for people land, there is the broader management from which you can build a company. Today, there are many such companies in Uganda for instance Jomayi Property Consultants, Hossana, Canaanites, Zion and Knight Frank. These firms manage all degrees of real estate; plots of land, houses or offices for rent, incomplete houses, complete houses, the list is endless. And most of these did not primarity start with money. It was with people.

Requirements

We have established that people can be the biggest asset in a real estate business. It is these people who will deliver services to gain big. But to offer quality services, not just anyone can engage in it.

“Real estate agents or managers must be professional, reliable, and must know how to efficiently manage time. They should also have knowledge on the trend of real estate in Uganda,” Agaba stresses, “By the time people look for an agent, they are looking for information on the real estate business and have no time to get it for themselves. So these are qualities that you should have in order to ably help them.” He adds that it is agents who have no information that destroy the credibility of the real estate agency.

To be an agent, you also need to appreciate the principles of marketing, negotiation and entrepreneurship. Marketing is also important because you are going to be selling to people and therefore you need to be able to convince them that whatever they buy will be worthwhile.