First published Feb 2021
Interested in starting a commercial real estate appraisal business this year? The process of moving from employee to being your own boss may not be as complex as you think. So, with that in mind, let’s take a closer look.
Last year, the US suffered a stark rise in unemployment, primarily due to the effects of the pandemic, and plenty of North American states are suffering from its consequences. For instance, Illinois has the tenth highest insured unemployment rate in the country at 7.6%. This is the percentage of people currently receiving unemployment insurance.
Despite the pandemic and its adverse effects, the US has seen a surprising surge in new businesses. In fact, there were more than a million new employer ID applications in September of last year, according to US Census Bureau data. This is undoubtedly due to how savvy Americans responded to unemployment and widespread business closures by starting their own companies for a new source of income.
Additionally, the government is actively proposing programs to support small businesses and boost the economy. Many state governments are offering small business grants, while communities are arranging events geared towards supporting local businesses. As an example, Seattle’s Small Business Stabilization Fund offers up to $10,000 to low- and moderate-income business owners. And this is only one of the multiple grant programs in the state of Washington.
There’s also the fact that it’s much easier to start a company now than ever before. Case in point: Starting your own limited liability company in Kansas can be pretty painless, especially in terms of the oft-dreaded paperwork. Not only is the form for articles of organization just three pages long, submitting it online is very easy, and often approved within 24 hours. Sending it by mail means waiting some three to five business days. It’s an extremely quick and convenient process, so it isn’t surprising why so many people have decided to go down this route.
Housing markets across the country remained surprisingly stable, with more people purchasing homes to keep up with the need for conducive work-from-home arrangements. As all commercial appraisers know, commercial real estate took a massive hit from the effects of the pandemic. Bloomberg reports that many commercial properties won’t be able to bounce back until 2022 — particularly, hotels, offices, and retail properties. Bloomberg showed slow recovery for apartments as well. However, there are already signs of recovery. Delinquency is very uneven depending on the employment status of the tenants. On the other hand, industrial properties, warehouses, and logistics centers are the exception to the rule, with plenty of entrepreneurs making use of them for delivery businesses. So, depending on your chosen specialty, you’ll be appraising properties on downswing or the upswing.
Now that you know the “why,” you need to know the “how.” Our ‘How to Start Your Own Appraisal Business’ article and webinar delve into the specifics, but here’s a general overview of the process:
Whether you’re starting a company from scratch or purchasing an existing one, you’ll need to undergo legal processes to ensure that the business is under your name. One option is the one we stated earlier — an LLC. You could also opt for other business models, such as a sole proprietorship or a corporation. The paperwork can be a chore but accomplishing these requirements can save you from a whole slew of legal issues later on.
Get in contact with lenders, attorneys, departments of transportation, taxing authorities, and any professionals who might need appraisal services. This takes time but necessary to get your company’s name out there and build new relationships with potential clients.
Too many appraisers contact a few lenders to get on their lists and stop there. A professional website and LinkedIn profile is critical to promoting your company. These will make your business more accessible to clients. It communicates that you are legit and not just “fly by night.”
Finally, invest in tools that can make business operations more efficient. Apart from the usual laptop, smartphone, and laser level, consider purchasing software specifically designed for commercial real estate appraisal. Not only will these tools make you more efficient and profitable but they also make your business more appealing to potential clients.
For more on this, and how you can optimize your real estate appraisals, learn more about Realquantum today.
Written by Jena Brood for realquantum.com
Realquantum is a SaaS company providing web-based real estate appraisal software and database products that accelerate the commercial real estate appraisal process.
Copyright 2023 realquantum
Built by Twofold.
