$116,460, is the mean annual income of a real estate agent in the US. Realtors are likely to be on high demand in the coming days as the need for real estate consultancy hits the roof in most states. If you are in the game already, positioning yourself should be your current focus.
You probably wonder what you need to do. Well, incorporating your venture into a limited entity is your answer. When you work hard to build your real estate business from the ground up, discover the most significant benefits of protecting you, your investment, and employees.
Read on to discover the benefits of incorporation and how to add that respectable tag “limited” to your real estate business.
1. Avoid Personal Liability and Protect Your Assets
You probably are handling a significant amount of cash as the business expands. As such, you ought to also realize that the extent of liability on your hands increases significantly. Legally, you’re financially liable as the owner of a real estate business.
The trouble with most real estate agents is that they assume that theirs is not a conventional business. If you have this thought line, you’re in trouble. You risk dealing with numerous lawsuits against your persona as an individual.
Incorporating your real estate business protects you from these legal implications. You’ll be glad to know that your assets are separate from the real estate venture after incorporation. If you consider the many legal implications that an unlimited status presents, you’ll be prompt in opting for incorporation.
2. Incorporation Makes Expenses Deductions Possible
As an unlimited realtor, you cannot make deductions. You’ll also not have the option to make debits on expenses. However, you’ll definitely incur these costs in the course of operations.
Any incorporation expert will tell you that this may cause financial strains on your business in the long-term. Turning your real estate venture into an LLP or an LP gives you the privilege to make 100 percent deductions from your total revenues before tax. Real estate LLCs or LCs can, therefore, enjoy the benefits of allowable deductions.
3. You Can’t Afford to Miss Out on Tax Breaks
You probably don’t know this, but Congress recently passed the tax bill. One of the main benefits of this tax bill will be new tax breaks for real estate agents. If you have an income cap above a certain level, you’ll be eligible for these breaks.
The only barrier between you as a realtor and these tax breaks is incorporation. Incorporating your business to an LLC or an LC automatically allows you to enjoy these tax breaks every 15th of April and saves you money. Awesome, right?
Taxation experts will also let you in on some other hidden benefits of incorporation. As a realtor, you may grapple with the fact that both profits and dividends are taxable. However, if your real estate agent is a corporation, you can elect subchapter S tax status exempting you from such tax deductions.
4. Incorporation Boosts the Credibility of Your Real Estate Business
One of the benefits of incorporation is the boost in credibility. You’ll likely deal with many reputable institutions such as banks over time. Having a limited corporation status accords you the legitimacy to engage.
Your business is also not cast on stone. You may need to engage with investors and external financiers over time. The limited status makes your real estate business to stand out as trustworthy.
Incorporating will also allow you to establish yourself in the community you operate in as a realtor. Legitimacy and credibility are critical to a business. Getting these two rare traits only requires that you incorporate your venture.
Clients are picky by nature. Most of your target audience will want to deal with a professional realtor. Fortunately, certain aspects can market you as a professional. Having the initial LLC or LC as part of your business name is one such facet.
You’re likely to attract a wide range of customers as a professional. You’ll be shocked at the extent to which clients value an established company. It will be easier for you to market your business as a certified limited company.
So you may be wondering how to incorporate a business? Below are some tips to guide you through.
How to Go About the Incorporation Process
Your vast knowledge of real estate is essential. However, the legal intricacies of incorporation call for the insights of a specialist. Incorporation can be hugely rewarding, but only if you get the entire process right.
Experts will consider your assets and the underlying state laws. You’re, therefore, safe in the hands of a seasoned incorporation expert. Consulting will ensure that you can go through the incorporation process without any hitches.
The following are a few steps that will get you there.
Fill Out an Easy Online Form
You need to diverge information about your business and investments. A reliable incorporation expert will guide you through the filling up of critical data.
Considering the Business Name
The incorporation expert will guide you through a preliminary name check for your real estate business. You will then get a go-ahead on whether your business name of choice is available.
No Need to Worry about Paperwork
Working with a reliable incorporation expert makes the paperwork process speedy. You need not worry about this tedious process. Your documentation will be with the Secretary of State in a jiffy.
Congratulations! You are Now a Limited Entity
As soon as the paperwork is complete, you’re good to go. The complete corporation package will be sent to you. You can now venture out and concur.
Your Real Estate Business Is Now Fully-Fledged
There is nothing more fulfilling than being on the right side of the law. You’re guaranteed to attract more clients, attract potential investors, and engage more with other businesses. There is an existing notion that incorporation is a tedious, time-consuming, and unrewarding process.
You’ll be shocked at how easy incorporation can be. You only need to engage the services of a seasoned expert, and you’re good to go. Corporate direct is your preferred service provider as you prepare to conquer.
Feel free to contact us for a speedy and flawless real estate business incorporation process.