Building a real estate business from the ground up is far from easy. From unpredictable markets to changing customer tastes, being successful as a real estate entrepreneur requires strong will to face challenges and commitment to the idea you believe in.
For those of you who are looking to step into the world of real estate, here are a few insights.
Need for innovation
As Henry Ford once famously said, “Had I asked people what they wanted, they would have asked for a faster horse”. Innovation should be at the heart of every business. If you look around and compare how life was a decade ago, it’s no surprise that the way we use commodities, the way we commute and a lot more things have drastically changed. We have become accustomed to this new way of life and it’s difficult to imagine it without these everyday apps and gadgets.
However, there is one product that has seen minimal innovation over the years. Our homes or the houses that we buy have more or less remained the same. There has been very little innovation in real estate overall. Considering that our way of living has completely changed over the last two decades and more so in the last 8-10 years, the kind of living spaces that are required also needs to change as per the lifestyle of today’s buyer or the millennials. One may ask the most obvious question -- What is it that they want? The answer to this is for manufacturers and builders to find out. For instance, Apple never asked the world whether they want to move from a blackberry or Uber never asked people whether they were happy hailing a cab or needed an app. As a real estate entrepreneur, one of the first lessons is to invest time in research and create products for the market. The consumer never knows if they want/need a new product. An entrepreneur has to introduce and expose the customer to a new product and only then they will forego the products they currently use.
Identify your target audience
Identifying your target market is a crucial step in the success of your business. All the products that we use is often targeted to a certain age group and then it’s used by the others as an aspirational product or service. Likewise, even in real estate it’s important to target your specific age groups. Create your products and services after carefully studying your target group. The homes that we live in also need to be created differently for different age groups, clearly identifying segmentation.
Build an exciting product or service
Gone are the days when real estate was an asset class and most of the buyers were ‘investors’. Today, these investors will probably not return to it for a long time, especially in the case of residential properties. Since properties cannot be sold like a financial product, it becomes imperative that we create products for the end users only. Be aware about the new preferences and the changes in the idea of living spaces. It’s important to spend time on in-depth research so that you can produce properties that are consumed and more so creates that excitement and interest in the market for a consumer to go out and buy.
Change is the only constant
The real estate industry has been living with a myth that the Indian buyer is very price sensitive and wants everything very cheap. No! There is a very evident difference in an ‘expensive product’ or ‘value for money’ product. The buyer is weary of the same type of 1/2/3 BHK apartments and hence negotiates hard, also because he does not find it worth investing in. Similar to how we have moved on from single screens to multiplexes, high streets to malls, from standing in queues to booking movie tickets online, the Indian consumer today is looking for change and is ready to spend money on these services/products. Today’s buyer is always on the lookout for a better experience and the moment they find it in a product, they are ready to buy it. As a real estate entrepreneur, have a keen eye and keep your ears open to new ideas and create products that cater to the changing tastes and preferences of the consumers.
Last but most obviously not the least, maintain clarity and honesty with your client dealings. Unfortunately, due to the malpractices in the past, the real estate industry is suffering today. Due to these malpractices, the consumer has lost faith in builders and they prefer to buy from trustworthy corporates. There have been instances of unfair practices which has led to the introduction of RERA. The real estate industry is going through major changes and huge consolidation is currently happening. Only those entrepreneurs who are honest and professional in their dealings will survive the change.
Yogesh Mehra is the Founder and CEO of Tribe Student Accommodation.