While the real estate industry had its ups and downs, it is still an incredibly lucrative field. Of course, getting in doesn’t happen overnight or effortlessly. You need to do your research, plan everything and start assembling the right crew. Nevertheless, while this is true for virtually any business out there, there are some rules specific to this industry. Speaking of which, here are several tips for starting your first real estate agency.
Get a license
While some people suggest making a business plan first (we’ll leave this for the second spot on the list), you should probably figure out a way to get a real estate agent license. Why? Well, because no investor or partner wants to listen about a real estate agency business plan from someone who’s not licensed and doesn’t belong to the industry. So, you need to look for a suitable course and work your way to your license. Also, it’s a good idea to try to work as an apprentice beforehand and find out if you belong to the industry.
Develop a business plan
As soon as you’re done with your entry into the industry, you need to focus on making a business plan. Here are some pointers to get you started:
- Make an executive summary;
- Write a business description;
- Analyze the market and organization management;
- Figure out your sale strategies, funding requirements and financial projections.
Even if some of these elements aren’t that comprehensive, you should probably still put them in writing. First, this erases the possibility that you’ll forget something later. Furthermore, you need to remember that something that’s obvious to you, may not be so for a potential partner or investor.
Choose a business model
As many people may already know, the very term real estate agency doesn’t reveal that much. Think about it, what does this mean? Does your agency sell the property or manage it? Does it have an online or an actual office? Keep in mind that in the 21st century, this question no longer has a straightforward answer, in any industry. Most importantly, are you running it on your own or do you expect to purchase a franchise and use someone else’s brand name in order to get a head start. This too is a question that needs to be addressed as early as possible.
Hire an accountant
The next thing you need to understand is the fact that your real estate agency needs a real accountant. You see, the figures that are involved in these transactions tend to be large and there are so many taxes to cover. Moreover, with any kind of property, there’s always the issue of the devaluation, that a regular person, even the one doing their own taxes, knows virtually nothing about. Therefore, you should probably outsource your real estate agency’s accounting. Another great alternative is to have a member of your own staff trained in this field. At very least, you can enroll them on a course to get a FNS40217 Certificate IV in accounting and bookkeeping.
Recognize opportunity and keys to success
Additionally, you need to understand that just because there are others in this field, even locally, this doesn’t mean that you’re guaranteed to succeed. What you need to do, prior to starting out, is recognize the opportunity and identify your own keys to success. Figure out what is it that will make your company succeed and play on your strengths. Then, identify the keys to your success. What this means is that you need to imagine the best-case scenario and then try to figure out what needs to happen for it to come to light.
Think about your workforce
Perhaps the most important thing of them all is to consider when starting a real estate agency is the issue of your workforce. Whether or not you sell the property depends directly on the ability of your real estate agents, seeing as how even the best of opportunities can be ruined by a blunder or a lack of confidence on their part. How efficient you are at managing your property depends on the competence of your staff, as well. This, on the other hand, comes in two parts. First, you need to make smart hires and second, you need to learn how to keep your start motivated. Working on a commission is what gives great results in the world of real-estate (because premiums are so high), however, you shouldn’t fret from using bonuses either, from time to time.
Closing thoughts
The last thing you need to understand is that while success may depend on a lot of factors, it most certainly won’t come overnight. Therefore you shouldn’t dismiss some decisions, techniques or methods before you actually give them a chance to prove their efficiency. Most importantly, you need to realize that disappointment doesn’t necessarily come from failure as much as it does from unrealistic expectations. To avoid this, make sure to have adequate goals and accurate fiscal projection on your side.