Learn how to grow a resilient Real Estate business in any market
Close your eyes and think about this for a moment. I want you to think back to the year 2019, prior to any of us ever having heard of the term ‘coronavirus’ or ‘COVID-19’.
You could be forgiven if you thought this was a golden year. The truth is…it wasn’t! It was an incredibly tough year for many! As I talk to all the Principals of Agencies that we provide services to, it’s easy to see how many of them were operating under tough market conditions last year.
However, this wasn’t the case for all. Some were thriving! What was the difference, you might ask? The simple answer is, they’d built a business designed for the winter and not the summer.
Now, fast forward 12 months and those same Principals that were thriving are still doing very well, despite what’s happened this year with COVID-19 striking.
This leads me on to the biggest lesson I learnt from the COVID-19 crisis.
You will never predict what will happen in your local marketplace, the wider community and more broadly, the economy. So, you need to build a sustainable business, that will do well in any environment, both positive and negative.
How do you do this? By implementing the following three strategies:
- Protecting your revenue
- Minimising your costs; and
- Mastering your mindset
How do you protect your revenue?
The sales revenue in a real estate business, is unpredictable! Why? Well, you have absolutely no control as to whether your local market goes up, down or sideways.
As opposed to property management revenue, which is somewhat largely predictable, as rents are much less volatile than both sales prices and sales volumes. Therefore, every real estate business with a rent roll is a safer proposition.
No matter your size, big or small, even a boutique, one-person real estate office can build a rent roll. Simply outsource various property management functions to freelance staff or contractors.
It’s possible as a solo operator to run a real estate sales business, whilst still managing around 50 properties. We’ve seen this on multiple occasions across the country in a variety of marketplaces.
How do you reduce your costs?
Whilst you may have limited control over revenue, you most certainly have full control over your costs.
Paul Davies of One Agency fame, is well quoted for saying… “It’s not what you make, it’s what you keep that counts” …and I for one, agree whole heartedly with him.
As a Real Estate Principal, that’s why you need to constantly monitor and work on minimizing your fixed cost structure; and further look at your variable costs too. Here are a few ideas to consider:
- Why not move out of your expensive, main street premises to a less visible office, perhaps upstairs in a building or down the corridor, and maybe even consider a virtual office? Nowadays, having a strong digital presence is widely understood and agreed to be much more important, than having a strong physical presence in your local marketplace.
- Consider outsourcing and sending some of your more menial tasks offshore. Outsourcing not only saves you money, but it also makes it simpler for you to scale up or down, as your revenue rises or falls.
- Think about refinancing your debts. Presently, interest rates are at an all time low, so it’s possible to save thousands of dollars in repayments per year. We suggest getting in touch with a finance specialist and have them investigate and search the market for current lower-rate loans.
- If you are part of a franchise group or other similar network, hold them accountable by way of fees and their service offering. Research the market and investigate if you can obtain a comparable offering with lower fees. Don’t be too concerned about changing brands, as no one brand can truly claim to be the ‘best brand’ in the marketplace. However, within each brand, you will find ‘best operators’!
How do you master your mindset?
During my 29+ years associated with the real estate industry, I’ve learnt that just as sure as the sun will come up tomorrow, so too will markets always turn — either for better or worse.
It’s best to build a resilient mindset, that can weather these ups and downs. You can’t afford to allow your mood or your mindset to go up and down in parallel with the market, as this is unsustainable.
When the market is on the up and up, you need to remain level-headed; when the market is in free-fall, you need to remain optimistic.
Have a plan, work your plan and reset as many times as necessary. A strategy that’s linked to your goals, will help keep you focused, no matter the state of the market.
Work harder on yourself than you do in your business. Associate only with positive people, that inspire you and lift your emotions. Read plenty of personal development books. Mind your mental and physical health.
If you are stressed or feeling low, then consider exercise to release some dopamine, listen to your favourite music, pray, or meditate. If that doesn’t work, then there is no shame at all, in holding up your hand to ask for help. There are several great organisations out there that specialize in this!
If you’ve got a steadfast and solid mindset, you’ll succeed in any market.
We hope this article has assisted you in learning how to grow a resilient real estate business in any market?
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Did you know that Real Estate Coaching Hub offers Real Estate Consulting services?
If you are interested in growing a more resilient business or organisation and would like some assistance in doing so, then please reach out to our resident Real Estate Growth Consultant, Darren Giles.
