Startup costs in real estate vary widely based on state rules, business models, and operational choices. Common expenses include licensing, education, insurance, and basic equipment, while additional costs depend on the business's structure.
scroll for more
Last Updated: January 21, 2026
Starting any business can involve significant upfront expenses, and real estate is no exception. Understanding the potential costs of starting a real estate business can help set realistic expectations early on.
Real estate startup costs can vary widely from one entrepreneur to another. Much of that variation stems from the chosen business structure, while location can also have a significant impact on costs. Regulatory requirements, such as local licensing and permitting, can further influence overall costs.
For example, independent real estate agents often encounter lower upfront expenses, commonly ranging from a few thousand dollars to the low five figures, depending on licensing, brokerage affiliation, and basic marketing costs. In contrast, small brokerages typically face higher startup costs that may reach the mid-five figures or more, as their operations often require additional resources. Property management companies often experience higher startup costs due to the need for software, staffing, and operational systems.
But those examples represent only part of the picture. Before breaking down individual cost categories, it can be helpful to look at the core expenses that are commonly required when starting a real estate business.
These cost ranges reflect commonly required expenses to obtain a real estate license and begin operating, but they do not represent the full cost of running a real estate business. Additional expenses — such as brokerage fees, marketing, office space, association memberships, or specialized software — may apply depending on the business model, location, and services offered.
One of the first major business expenses in the real estate industry is obtaining a license. States regulate real estate professionals independently, so each state sets its own education requirements and associated fees.
Fees for training courses, license applications, and exams usually vary. Some states might even require background checks or fingerprinting as part of the approval process. For example, in California, pre-licensing education costs approximately $500, and real estate licensing exam fees range from $100 to $150 for salespersons and brokers, respectively, according to the California Department of Real Estate. Additionally, initial licensing fees in California typically range from $350 to $450, depending on the license type and the timing of the application.
In Texas, sales agent license application fees are $206, while real estate broker application fees are $308, based on the state’s published fee schedule. These figures do not include required education costs and reflect publicly available information at the time of publication.
Overall, real estate exam and licensing fees vary significantly from state to state. More accurate licensing and education cost estimates are typically available through state real estate commissions or licensing authorities.
The legal structure of a real estate business also affects startup costs. Some real estate business owners opt to operate as sole proprietors, which doesn’t require registration with a state agency like the Secretary of State.
However, many entrepreneurs choose to form a corporation or LLC for real estate, two business entity types that require registration. Filing fees to register a business vary from state to state. Some states even charge different filing fees for different entity types. For accurate information, business owners usually need to consult their state’s government website to confirm fees.
Many professionals in the real estate market decide to work with a brokerage firm or even a national association. Those affiliations can have myriad benefits for the business owner, but working with a brokerage brings its own set of costs. Brokerages often charge monthly desk fees, transaction fees, or other administrative costs that can add up. Brokerages may also create different commission structures, affecting how income is shared between members.
Some real estate pros also opt to join professional associations to gain access to listing services or industry resources. Fees for these services and groups aren’t universal, but many charge annual or monthly fees. Often, these expenses vary depending on the level of support the association provides, but its location can have an impact, too.
No matter what industry a business is in, overhead costs for office space and equipment have a big impact on the company’s startup costs. Real estate is no exception.
Some real estate professionals, especially independent agents, use a home office. Naturally, their costs are lower because they already have access to that space. Those professionals can get by investing in only the essential equipment. That said, some of these agents may use coworking spaces, which balance a monthly or yearly fee with shared amenities.
Larger real estate businesses usually have higher equipment costs than smaller ones, too. No two offices are the same, but many need a computer and phone for every employee, plus enough printers and office supplies to keep everything running smoothly. The specific cost breakdown usually depends on the size of the business and the type of work environment the owner wants to create.
Marketing often plays a key role in establishing a new real estate business. Common marketing budgets cover website creation, photography for listings, business cards, print materials, online advertising, and other real estate marketing strategies used to build visibility. Some businesses expand into social media branding, digital campaigns, or local signage.
Often, marketing costs vary based on the methods chosen and the business’s visibility goals. No single approach fits every market, so startup spending in this area often depends on the business’s style and pace of growth.
Software tools are a big help to real estate businesses. For example, lots of real estate professionals rely on customer relationship management (CRM) software, electronic signature platforms, listing tools, and transaction management software. A business owner who’s starting their own brokerage would probably need to buy these tools themselves, while an agent who’s joining an existing brokerage might get access to these tools as part of their membership fees. Meanwhile, an independent agent might get by with fewer software tools to begin with.
Ultimately, a real estate business’s technology costs will depend on the systems the owner selects and the number of people who need to use that technology.
Many real estate businesses need some level of insurance coverage. For example, errors and omissions (E&O) insurance is a common choice in the industry; it may even be required in some states or brokerages. However, no two insurance policies cost the same amount; the fees will vary depending on the coverage the business owner selects, their location, and the size of their business.
If a business owner has commercial office space, hires employees, or manages a large number of properties, they may be required to (or choose to) get policies like general liability insurance, property insurance, or workers’ compensation insurance.
Insurance requirements can vary by state and brokerage, so official state guidance often outlines which policies may apply.
Like many professional industries, real estate professionals are required to maintain up-to-date credentials. Often, that means that many agents will need to renew their licenses as needed and attend continuing education courses. That said, states set their own rules for continuing education, including the specific classes required and the number of course hours that must be fulfilled within a designated time period.
License renewal fees vary by state, too. For example, California charges the same renewal fee as the initial license application (as long as the application’s on time). Meanwhile, Texas charges lower fees to renew a sales or broker license compared to the original application. But these are just two examples, and state fees vary widely.
Some real estate businesses choose to invest in additional services as they grow. For example, some entrepreneurs hire other professionals to help them with staging homes or taking pictures of listings. Others get help coordinating transactions, or they’ll pay for lead generation services.
Many of these services are completely optional (but helpful), so the costs will vary from business to business. Many entrepreneurs choose to add these services gradually as their business volume increases.
The initial cost to start a real estate business varies by business model. Independent agents usually require the lowest budgets, generally for licensing, brokerage fees, and marketing. Small and medium-sized teams are able to share expenses, but their overall costs are higher than those for solo agents due to more extensive operations.
The largest real estate businesses, such as property management businesses, tend to have the highest costs because they need a variety of software, a lot of team members, and even insurance policies.
Each model brings its own cost patterns, which create a wide range of possible startup totals.
It’s challenging to estimate the exact cost of starting a real estate business, as many expenses vary significantly from one real estate business type to another. Even the location alone has a big impact on startup costs. Additionally, the business’s scale heavily impacts those expenses.
Independent real estate agents often enter the industry with relatively low startup costs, frequently falling within the low thousands to low five-figure range. These costs typically include licensing, brokerage affiliation fees, basic marketing expenses, and essential technology requirements.
Next, small real estate brokerages have slightly higher startup costs to cover expenses such as office space, larger licensing fees, expanded marketing plans, well-staffed teams, and even administrative support. As a result, their startup expenses typically range into the mid-five-figure range.
Larger firms, such as property management businesses, often have the highest startup costs, sometimes reaching the higher end of five figures or even creeping into the six-figure range. Their expenses will still cover licensing costs for team members, insurance policies, and office expenses. However, these businesses often need additional tools like software to track maintenance and rent for managed properties.
This guide has mentioned expenses related to legal expenses, like real estate licensing and permits, several times. Their importance can’t be overstated. It’s also worth mentioning that there may be additional expenses associated with complying with local regulations.
For example, some state and local governments may have rules and permit requirements to help maintain fair housing in the area. Some municipalities may have regulations about signage, advertising, and property management standards, all of which can contribute to higher costs. Regulatory requirements can add to startup costs, and understanding these obligations helps clarify both compliance responsibilities and related expenses.
In short, estimating the exact cost of starting a real estate business can be challenging due to the number of variables involved. Knowing the factors that influence costs, from licensing fees to continuing education expenses and everything in between, can help entrepreneurs have a better idea of what to expect.
Start a Business in Your State
Popular States for Starting a Small Business
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. For specific questions about any of these topics, seek the counsel of a licensed professional.
Written by ZenBusiness Editorial Team
The ZenBusiness Editorial Team has more than 20 years of combined small business publishing experience and has helped over 850,000 entrepreneurs launch and grow their companies. The team’s writers and business formation experts are dedicated to providing accurate, practical, and trustworthy guidance so business owners can make confident decisions.
Ready to Start Your Nail Salon?
Start Your Real Estate Business Today!