A real estate investment company is a company whose only objective is to invest in real estate holdings. Real estate investment businesses, in their most basic form, will acquire, manage, and resell real estate assets with the goal of profiting beyond the initial investment.
Buying, managing, and renting out or selling real estate for profit are all aspects of real estate investing. A real estate entrepreneur or investor makes active or passive real estate investments. To increase the value of their investments, some investors actively develop, upgrade, or renovate real estate.
According to statistics, the Canadian real estate market generated $58.5 billion in total revenue in 2020, which is a 1.8 percent CAGR from 2016 to 2020. In Q2 2022, Canada’s real estate sector contributed 8.7 percent of GDP, a decrease of 1.1 points from the prior quarter and 1.5 points from the previous year.
Steps on How to Start a Real Estate Investment Company in Canada
Table of Contents
Conduct Market Research
You should not start a real estate investment company without first completing market research because doing so is essential to the business’s success. Market research offers essential information about your industry and competitive environment.
You may use it to determine who your consumers are, where they are, and who is most likely to do business with you. In essence, extensive market research will enable you to comprehend the mindset of your target market and adjust to their needs in order to win their loyalty.
a. Who is the Target Market for Real Estate Investment Companies in Canada?
- Accredited Investors
- Wealthy People in the Society
- Investment Clubs
- Top corporate executives
- Corporate Organizations/Blue Chip Companies
b. Is a Real Estate Investment Company a Profitable Business in Canada?
Yes, a real estate investment business is a profitable business in Canada. As a matter of fact, Canada is one of the countries in the world that attracts loads of property investors.
c. Are There Existing Niches in the Industry?
No, there are no niche ideas in the real estate investment business.
d. Who are the Major Competitors?
- Crestpoint Real Estate Investments Ltd.
- Starlight Investments
- InterRent Real Estate Investment Trust
- Choice Properties
- Timbercreek Asset Management
- Fengate Asset Management
- Tricon Capital Group
- Claridge Investment Ltd
- TD Greystone Asset Management
- Street Smart Real Estate Investing
- Crown Property Management Inc.
- Real Property Management Limited
- Platinum Real Est Group Corporation
- Pulis Investment Group
- Agellan Capital Partners Inc.
- Lakeshore Group
- Woodbourne Capital Management
- BTB Real Estate Investment Trust
- Turner Drake & Partners
- Prestigious Properties Canada Ltd.
e. Are There City or Province Regulations or Zoning Laws for Real Estate Investment Business in Canada?
No, there are province regulations or zoning laws for real estate investment businesses, but players in this industry are expected to work with the existing regulations governing similar businesses in the county or state where their business is domiciled.
f. Is There a Franchise for Real Estate Investment Business?
No, there are no franchise opportunities for real estate investment businesses in Canada
g. What Do You Need to Start a Real Estate Investment Business in Canada?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- Office Space
- Computers, Laptops, and Servers
- Goods and Services Tax/ Harmonized Sales Tax (GST/HST)
- A Corporate Bank Account
- Software Apps
- Startup Capital (Working Capital or Investment Funds)
Choose a Memorable Business Name
When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for a real estate investment business are;
Creative Real Estate Investment Business Name ideas
- Gand Ville© Real Estate Investment Company, Inc.
- Mark Gibson® Real Estate Investment Company, Ltd.
- Brampton Partners© Real Estate Investment Company, Inc.
- Phineas Group® Real Estate Investment Company, Inc.
- Rhodes Rover™ Real Estate Investment Company, Inc.
- Chris McNamara™ Real Estate Investment Company, Ltd.
- Alex Holland© Real Estate Investment Company, Ltd
- Real Invest® Real Estate Investment Company, Inc.
- Halifax Investors© Real Estate Investment Company, Inc.
- Sherbrooke Eden© Real Estate Investment Company, Inc.
- Fredrick Jefferson® Real Estate Investment Company, Inc.
- Green Group® Real Estate Investment Company, Inc.
- Jude O’Conor® Real Estate Investment Company, Inc.
- Theo Davies® Real Estate Investment Company, Inc.
- Windsor Partners® Real Estate Investment Company, Inc.
- Grande Prairie® Real Estate Investment Company, Inc.
- Emmanuel Pitney™ Real Estate Investment Company, Ltd
- DKW Group® Real Estate Investment Company, Inc.
- Mitchel Francis® Real Estate Investment Company, Inc.
- Jylland Group™ Real Estate Investment Company, Inc.
Register Your Business
a. What Type of Business Structure is Best for Real Estate Investment Business in Canada?
You have four alternatives for business structures when creating a real estate investment company in Canada, but the corporation is the one that most people in this industry prefer. A corporation has limited liability—the owners are not liable for the debts or liabilities of the business.
Obtaining funding from investors or financial organizations is simpler. Additionally, it is necessary to be incorporated in order to transact business with governments or other companies, and business income can be distributed in the form of dividends or salaries, allowing you to minimize your tax liability.
Please note that all Canadian businesses must register their names in their respective provinces or territories, with the exception of sole proprietorships that use only the owner’s legal name without any additions (except in Newfoundland and Labrador, where neither partnerships nor sole proprietorships are required to register their names).
b. Steps to Form a Corporation in Canada
- Whether it is a federal or provincial/territorial incorporation, register your business.
- Contact the Canada Revenue Agency to open a corporate income tax account and obtain a federal business number (CRA).
- In other Canadian jurisdictions where you want to conduct business, register as an extra-provincial or extra-territorial corporation.
c. What Type of License is Needed to Open a Real Estate Investment Business in Canada?
- General Business License
- Real Estate License
- Provincial Permits (Applicable in some cities)
- Signage Permit
d. What Type of Certification is Needed to Open a Real Estate Investment Business in Canada?
- Certified Commercial Investment Member (CCIM)
- Certified Property Manager (CPM)
- Certified Real Estate Team Specialist (C-RETS)
- Certified International Property Specialist (CIPS)
- Seniors Real Estate Specialist (SRES)
e. What Documents are Needed to Open a Real Estate Investment Business in Canada?
These are some of the primary legal documents that you are expected to have in place if you want to legally run a real estate investment business in Canada;
- Goods and Services Tax/Harmonized Sales Tax (GST/HST)
- Council Permit
- Business and liability insurance
- State Permit and Building Approval
- Certificate of Incorporation
- Business License
- Business Plan
- Contract Document
f. Do You Need a Trademark, Copyright, or Patent?
If you have plans to start your own real estate investment business in Canada, you probably won’t need to file for a trademark or intellectual property protection. This is true because the nature of the business makes it possible for you to run the company successfully without needing to take legal action against anyone who uses your intellectual property without your permission.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Real Estate Investment Business in Canada?
The capital needed to start a real estate investment business could range from $1 million to over $20 million.
b. What are the Costs Involved in Starting a Real Estate Investment Business in Canada
- Business Registration Fees – $750.
- Legal expenses for obtaining licenses and permits – $7,300.
- Marketing, Branding, and Promotions – $5,000.
- Business Consultant Fee – $2,500.
- Insurance – $5,400.
- Rent/Lease – $200,000.
- Other start-up expenses include commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($2,800).
- Operational Cost (salaries of employees, payments of bills et al) – $100,000
- Start-up Inventory – $15,000
- Store Equipment (cash register, security, ventilation, signage) – $4,750
- Furnishing and Equipping – $80,000
- Liquid Cash for Execution of Projects: $3.5 million
- Website: $600
- Opening party: $3,000
- Miscellaneous: $10,000
c. What Factors Determine the Cost of Opening a Real Estate Investment Business in Canada?
- The size of the real estate investment business
- The choice of location
- The required licenses and permits
- The type of facility
- The additional services offerings
- The cost of branding, promotion, and marketing of the real estate investment business
- The cost of furnishing and equipping the real estate investment business facility
- The cost of the insurance policy covers
- The cost of registering the business
- The cost of recruiting and training your staff
- The cost of the purchase and customizing of uniforms
- The cost of the grand opening of the real estate investment business
d. Do You Need to Build a Facility?
Your real estate investment company can be run from a leased or rented office space, so you don’t necessarily need to build a new facility for the business.
e. What are the Ongoing Expenses of a Real estate investment business?
- Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
- Commissions and charges
- Salaries of employees
f. What is the Average Salary of your Staff?
- Chief Executive Officer – $85,000 Per Year
- Project Manager – $72,000 Per Year
- Head of Construction and Renovation – $70,000 Per Year
- Company’s Lawyer/Secretary – $68,000 Per Year
- Admin and HR Manager – $45,000 Per Year
- Business Developer/Sales and Marketing – $42,000 Per Year
- Accountant – $40,000 Per Year
- Customer Service Executive/Front Desk Officer – $30,000 Per Year.
g. How Do You Get Funding to Start a Real Estate Investment Business in Canada
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
Real Invest© Real Estate Investment Company, Inc. is a registered, licensed, and accredited real estate investment trust (REIT) company that will be based in Toronto, Ontario. The business will take care of every aspect of real estate investment and related services for clients and partners.
We will acquire, manage, and resell real estate assets with the goal of profiting beyond the initial investment. Our partner’s and client’s best interests always come first and our values and code of conduct will serve as the foundation for everything we do. We will make sure to work with experts who have a lot of experience in the industry.
b. Products and Service
- Houses and housing estate developments
- Apartments and other residential developments
- Commercial developments
- Industrial developments
- Other developments (Investment Properties)
- Real estate consultancy and advisory services
c. Mission Statement
Our mission is to buy property first, work with landowners to form partnerships, and then create a strategy for what to construct or reconstruct on that particular piece of land. We will enlist investors and make financial projections for the new residences or enterprises.
Our vision is to build a real estate investment business that will become the number one choice for investors and corporate clients in Toronto, Ontario, and all across Canada.
d. Goals and Objectives
The goals and objectives of the real estate investment business are to get involved in purchasing, managing, and selling or renting real estate with the sole aim of making a profit for the company and all its business partners.
e. Organizational Structure
- Chief Executive Officer
- Project Manager
- Company’s Lawyer/Secretary
- Admin and HR Manager
- Head of Construction and Renovation
- Business Developer/Sales and Marketing
- Client Service Executive (Help Desk Office)
a. SWOT Analysis
- Managing partners bring industry expertise and put time and effort to manage the project, while limited partners provide the capital required to fund the project.
- Ideal location for property development (thriving real estate market)
- Access to finance from business partners
- Robust relations with property owners and properties investment moguls
- Good returns on investment for investors.
- Financial Constraints
- A new business that will be competing with well-established real estate investment businesses
- Inability to retain our highly experienced and qualified employees longer than we want
- Toronto, Ontario is a thriving market for property development companies and the real estate industry.
- Good support structure for real estate investment businesses in Canada.
- The arrival of a new real estate investment business within our market space
- Unfavorable government policy and regulations
- Differences in management culture
- Liability problems
- Community resistance
- Continuously changing consumer demands especially as it relates to how they expect real estate investment businesses to serve them.
b. How Do Real Estate Investment Businesses Make Money?
Real estate investment businesses make money by engaging in the following;
- Houses and housing estate development
- Apartments and other residential development
- Commercial development
- Industrial development
- Other developments (Investment Properties)
- Real estate consultancy and advisory services
c. Payment Options
- Payment via bank transfer
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
d. Sales & Advertising Strategies
- Introduce your real estate investment business and the services your offer by sending introductory letters alongside your brochure to corporate organizations, investors, and other key stakeholders throughout the city where your real estate investment business is located.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, and LinkedIn to get your message across
- Build a basic website for your business so as to give your business an online presence
- Directly market your business
- Advertise your business in community-based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word-of-mouth marketing (referrals)
a. How Much Should You Charge for your Product/Service?
The amount real estate investment companies charge for their properties depends on the type of property and the location of the property. Please note that a typical property in Canada sells for $640,479, according to the Canadian Real Estate Association.
Since September 2021, the average home price has decreased by 6.6 percent. However, this does not imply that home prices have decreased nationwide.
b. How Much Profit Do Real Estate Investment Business Owners Make a Year in Canada?
A typical real estate investment business owner in Canada will make between $140,000 to over $300,000 per year in profit.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the real estate investment business
- The location the real estate investment business is covering
- The management style of the real estate investment business
- The business approach of the real estate investment business
- The advertising and marketing strategies adopted by the real estate investment business
- The number of years the real estate investment facility is in business
d. What is the Profit Margin of a Real Estate Investment Business?
The profit margin of a real estate investment business is not fixed. It could range between 15 percent to 20 percent or more.
e. What is the Sales Forecast?
Below is the sales forecast for a real estate investment business. It is based on the location of the business and other factors as it relates to such startups in Canada;
- First Fiscal Year (FY1): $2.5 million
- Second Fiscal Year (FY2): $5.5 million
- Third Fiscal Year (FY3): $7 million
Set Up your Shop/Office
a. How Do You Choose a Perfect Location for a Real Estate Investment Business in Canada?
- The demography of the location as it relates to investors and real estate activities
- The demand for properties in the location
- The purchasing power of businesses and residents of the location
- Accessibility of the location
- The number of real estate investment businesses in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What City and Province are Best to Open a Real Estate Investment Business in Canada?
- Toronto, Ontario
- Vancouver, British Columbia
- Edmonton, Alberta
- Winnipeg, Manitoba
- Montreal, Quebec
- Calgary, Alberta
- Regina, Saskatchewan
- Mississauga, Ontario
- Kitchener, Ontario
- Hamilton, Ontario.
c. What Equipment is Needed to Operate a Real Estate Investment Business?
You should be prepared to purchase software applications, computers (laptops), an internet facility, a telephone, a fax machine, and office furniture (chairs, tables, and shelves).
On average, you are expected to have some key roles occupied by experienced professionals hence you should make plans to hire a Chief Executive Officer (you can occupy this role), Project Manager, Company Lawyer (Secretary), Admin, and HR Manager,
Head of Construction and Renovation, Business Developer (Sales and Marketing Officers), Accountant and Customer Service Executive (Front Desk Officer). You will need a minimum of 10 staff to successfully run a real estate investment company.
Launch the Business Proper
In recent times, no real estate investment company opens its doors for business without first organizing an opening party to formally launch the business. A low-key launch party rather than a big opening party can be the better option if you have a tight budget.
a. What Makes a Real Estate Investment Business Successful?
- Ability to identify good deals and investment
- Willingness to take chances
- Customer-centric business approach
- Good marketing and sales approach
- Strong vision
- Passionate leadership
- Innovative ideas
b. What Happens During a Typical Day at a Real Estate Investment Business?
- The office is open for the day’s work
- Activities for the day are reviewed
- Employees go straight to their job description (construction staff go to construction sites)
- Marketers go all out to market the service offerings of the company
- Administrative jobs are done
- Reports are written and submitted to superior officers
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Real estate investment business?
- Excellent property development and management skills
- Excellent risk management skills
- Excellent Accounting and Bookkeeping Skills
- Excellent investigative skills
- Excellent marketing skills
- Excellent computer skills
- Ability to Pay Attention to Details
- Good managerial and human development skills
- Visionary Leadership
- Team-building & Interpersonal Skills.
- Excellent communication and negotiation skills.
- Organizational skills.
- Problem-solving ability.
- Good Supervisory skills
- Experience in managing real estate investment business
- Experience in business administration