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NAICS, short for “North American Industry Classification System,” is a six-digit code that identifies your business's industry and the services you offer. The federal government established this system to collect statistical information about different industries in the North American economy.
Here, we'll learn how to find the proper NAIC codes for your real estate business, assign the different codes that align with your services, and use this classification system to expand your business.
What Is a NAICS Code?
NAICS is a code that establishes a single standard for accurately assessing different business and industry landscapes across the United States, Canada, and Mexico (hint: it's pronounced "nakes" — like "snakes").
The purpose of NAICS codes is to provide government agencies with key statistical information and economic data on North American businesses at the federal, state, and local levels. This enables government agencies and policymakers to examine market trends and make better decisions regarding regulations, incentives, and other programs.
Let's explore how this classification system benefits business owners.
How Can a NAICS Code Benefit Your Business?
If you’re planning on starting a real estate business or have already been in the industry for a while, make sure your services align with the proper NAICS codes to reap all the benefits.
While you are not typically required to have a NAICS code for your real estate business, the benefits of having one are clear:
- Loan approval: Simplifies the loan application process and improves your chance of approval
- Federal contract bidding: Allows you to participate in government projects and bid on federal contracts
- Incentive programs and grants: Opens the door to incentive programs and grants, which can be found on your state’s government website
- Tax advantages: Gives you the opportunity to apply for tax credits and exemptions
- Market research and competitive analysis: Enables you to classify vendors, partners, and customers by industry in order to identify potential leads, trends, and competition
To receive the most benefits, research the best states for forming a real estate LLC before getting started.
Understanding Your 6-Digit NAICS Codes
Let's break down the hierarchy of six-digit NAICS codes in the real estate industry:
- The first two digits — "53" — are sector-specific and cover "real estate," which comprises the umbrella services of real estate, rental, leasing, and all other related activities. (Note that code "52" also covers some sectors in the real estate industry.)
- The next two digits provide the subsector. For example, “11” is the category for “lessor of real estate.”
- The fifth and sixth digits following the 5311 code relate to the specific industry and service within the sector.
Here are some examples of real estate NAICS codes:
|
NAICS Codes |
NAICS Description |
|
531110 |
Lessors of Residential Buildings and Dwellings |
|
531120 |
Lessors of Nonresidential Buildings and Dwellings |
|
531130 |
Lessors of Miniwarehouses and Self-Storage Units |
How to Find Your NAICS Codes
Follow these four steps to find your NAICS real estate codes:
STEP 1: Go to the U.S. Census Bureau website to find up-to-date NAICS codes. (You can also visit the NAICS website to search by specific keywords.)
STEP 2: Fill out the first cell box by providing the general keyword for your business. In this case, use “real estate.”
STEP 3: Determine the six-digit codes that match the services provided by your real estate business. Remember that more than one NAICS code may apply.
When searching “real estate,” you'll notice there are dozens of codes, and each specific six-digit code covers several services. Code 531210 alone covers 20 real-estate-related services:
STEP 4: Double-check the accuracy of the codes you choose, and make sure they represent the services offered by your business.
Once you've found your NAICS codes for your real estate business, you can provide them whenever requested by business partners, government agencies, members of your team, or customers.
NAICs Codes for Real Estate
The U.S. Bureau of Labor Statistics lists some of the most common real estate NAICS codes used to identify specific services in the real estate industry. A few are listed below:
Real Estate Title Companies
NAICS 524127 — Real Estate Title Insurance Carriers, Direct
This code applies to title insurance carriers.
Real Estate Investments
NAICS 525990 — Real Estate Mortgage Investment Conduits
This code includes retail mortgage investment conduits (REMICs), real estate trusts, and other investment vehicles.
NAICS 531110 — Lessors of Residential Buildings and Dwellings
This code includes equity real estate investment trusts (REITs), primarily leasing residential buildings and dwellings.
NAICS 531120 — Lessors of Nonresidential Buildings and Dwellings
This code covers equity real estate investment trusts (REITs), primarily leasing nonresidential buildings (except miniwarehouses).
NAICS 531130 — Lessors of Miniwarehouses and Self-Storage Units
This code can be selected for businesses focusing on equity real estate investment trusts (REITs), primarily leasing miniwarehouses and self-storage units.
NAICS 531190 — Lessors of Other Real Estate Property
This code can apply to equity real estate investment trusts (REITs), primarily leasing real estate (except residential buildings and dwellings, nonresidential buildings, miniwarehouses, and self-storage units).
Real Estate Agents and Brokers
NAICS 531210 — Office of Real Estate Agents and Brokers
This code applies to businesses working on behalf of buyers, sellers, and renters.
Real Estate Management
NAICS 531311 — Residential Property Managers
This code can be selected by businesses involved in managing residential properties on behalf of homeowners who are offering their dwellings as long-term or short-term rentals. Tasks engaged by these businesses can include rent collection, property maintenance, advertising, and all the associated paperwork and documentation with prospective tenants.
NAICS 531312 — Residential Property Managers
This code covers commercial property, condominium, and nonresidential property management.
Real Estate Lessors
NAICS 531110 — Lessors of Residential Buildings and Dwellings
This one covers lessors of residential buildings and dwellings, including apartments, condominiums, and houses.
NAICS 531120 — Lessors of Nonresidential Buildings and Dwellings
This code applies to lessors of nonresidential properties, including office buildings, retail stores, and commercial spaces, but excludes miniwarehouses.
NAICS 531130 — Lessors of Miniwarehouses and Self-Storage Units
This code encompasses miniwarehouses and self-storage facilities.
Quick note: You’ll notice that some of the above codes repeat for the different services offered. That’s okay. As long as the description fits the business activity, you can assign the NAICS code to your service.
Commercial Real Estate
NAICS 531312 — Nonresidential Property Managers
This code applies to commercial (nonresidential) properties, including offices, office buildings, retail stores, and other types of business facilities like office parks, shopping centers, and manufacturing facilities
Real Estate Appraisers and Consultants
NAICS 531320 — Office of Real Estate Appraisers
This code covers the offices of real estate appraisers and is used by businesses with consulting services that cover property value estimates, mortgage lending options, and advice, including input on code violations and the condition of the property.
NAICS Frequently Asked Questions
What Is the NAICS Code for Real Estate Property?
You can use an all-encompassing NAICS code for real estate property if your service doesn't match any of the codes found in the NAICS system. Code NAICS 531390 covers “other activities related to real estate," including real estate flipping, real estate holding companies, and real estate development.
Which States Require NAICS Codes?
Some states require NAICS codes during the business formation process. If you're just getting started with your real estate business, check out these surprising real estate market predictions.
States that require NAICS codes during LLC formation include the following:
- Alaska
- Arkansas
- Connecticut
- Georgia
- Louisiana
- Mississippi
- New Hampshire
- New Mexico
Can I Add a New NAICS Code to My Business?
Yes, you can add a new NAICS code to your business. Simply follow the steps outlined above to find your new NAICS codes, then it's up to you to update your business profiles, government directory, and any other online profile. Don't forget to update your company website and marketing materials as well.
Make sure to update your NAICS codes if your real estate business offers new services, including appraisals or meetings with agents, brokers, and real estate investors.
Get Started on Your Real Estate LLC with Incfile
A NAICS code can allow you to better understand the economic landscape of your industry, offer you tax advantages, and improve your chances of receiving loans, grants, and contracts. If you’re ready to get your real estate business formed, learn more about Incfile's $0 LLC formation.
Peter Mavrikis
Peter Mavrikis is an author and editor with over 25 years of experience in publishing. He has worked as the Editorial Director for Barron’s Educational Series, as well as Kaplan Test Prep, where he ran the test prep, foreign language, and study guide divisions. Peter has also written several books on history, exploration, science, and technology.
