How to open a real estate agency: a business plan
The niche of real estate and real estate services remains one of the most profitable in Russia. This explains the annual growth in the number of different agencies. Despite the rather tough competition, with a well-organized approach to all points, opening a real estate agent is considered a promising and profitable business idea. But to create a stable business, you will need to develop a good client base and gain the trust of the population. The business has a low entry threshold, which attracts a large number of newcomers to the business. Most of them cannot withstand the competition and are closed within a year. Therefore, it is necessary to carefully consider the business strategy, if possible, acquire connections and take into account all the details.
Relevance of the project
The real estate business is one of the most relevant and profitable projects that can be opened at the moment. This is because the business does not require large start-up capital, and with a good strategy and implementation, it becomes a source of profit.
The relevance of the case is determined by the constant demand in the market. But it also may not be stable, it is affected by:
- A crisis.
- Exchange Rates.
The entrepreneur needs to constantly monitor the slightest changes in order to have time to take action before the situation gets out of control.
How much money does it take to open a real estate business?
To start a business with real estate services, you need to calculate the start-up costs.
The main points to complete:
- To register a business – 10,000 rubles.
- Renting a room for an office of the company – 35,000-70,000 rubles (depending on the size of the room).
- Advertising campaign of the agency – 50,000 rubles.
- Purchase of the necessary furniture and equipment for the office – from 50,000 rubles.
- Accounting services provided to an outsourcing company – from 3,000 rubles.
- The cost of transport, mobile communications, utilities – 15,000 rubles.
To open an agency you will need 100,000-300,000 rubles.
How does an agent make money?
Such agencies usually operate under piece-rate rules. A percentage is accrued from each successfully completed transaction. It can vary from 10% and go up to 70, but most often both parties are satisfied with the deal by 50%.
The staff of 10-20 agents is a small firm; on average, large projects employ about 100 specialists.
Of course, you can create a business where the manager will perform all functions and occupy 1 job, but then you should not hope to get big profits.
Business income, profitability
The profit of each agency is individual, depending on the client base and the ability of employees to get the client to sign an agreement.
It is impossible to predict how much profit the opening of a real estate agent will bring because everything depends on many stages. We can say that the profit in this business is really good because small and medium-sized agencies have been successfully working for years.
Why are real estate agencies so popular?
Most aspiring entrepreneurs think that the real estate business is very easy money. In small towns, there are dozens of agencies, and in large cities, the number in the hundreds. But, nevertheless, new ones open annually.
The main reasons for the relevance of a business idea:
- Low entry threshold – you will need to rent an office and equip it.
- At the start of a business, a leader can perform all functions alone, without hiring personnel.
- High-margin business (you can earn 30-50 thousand rubles from one client).
- No special knowledge or skills are required, it is enough just to communicate with people, and all information about the business can be studied on the Internet.
Almost every new agency is opened by a former realtor who already has an established client base.
Of course, at the start it will be difficult to deal with already promoted, large-scale firms. To better understand the basics of work, you can initially get a job in a similar office, run personally, and talk with clients. And then, with the accumulated experience, to develop your business.
Real estate agency work algorithm
Before you open a real estate agency from scratch, you need to study all the nuances of their work. The list of services provided by such companies is very diverse. You can be engaged in only one direction or combine residential and commercial real estate and work in them.
You can also be engaged in the resale of housing or looking for clients for the delivery of apartments and houses for rent.
Usually, the activities of any agent are as follows:
- Working with sellers – the agent prepares all the necessary documents, conducts demonstrations of the premises to everyone, deals with paperwork and concludes the final deal.
- Working with the buyer – the agent is looking for apartment options that would fit the criteria set by the client. Then he checks the premises from the legal side, so that everything is legal, shows the apartment to the client and accompanies the conclusion of the transaction.
Provision of information services
The business plan of the real estate agent should contain an exact list of services that will be provided in the future. One of them is an information service that helps clients figure out how to sell or purchase housing on their own.
For a certain cost, the agency can offer the client to view the database of dwellings that are for sale in order to choose the one that suits them.
A company based on the provision of leased premises works in a similar way: they look for clients, show the base, and conclude a deal for 50% of the rent.
Creation of an international agency
It is not difficult to create an international agency, because on the Internet you can find various companies offering services abroad. Usually, they are happy to cooperate, they will need to conclude an agreement and start partnerships.
But it should be borne in mind that there will be significantly fewer customers for such services, so such activities should be organized in addition to the main one.
Business start-up step by step
To create a business, you will need to go through a few simple steps on the way to opening. You will need to choose a form of doing business, officially register, select an office and employees, and conduct an advertising campaign.
Business registration, required documents
You will not need a license to work in this direction. You need to officially register by choosing a form and register with the tax authority. Real estate agency opening and paperwork will take several months.
At the start, you can register as an individual entrepreneur, which is much easier and does not require much effort, also in the case of fines, they will be minimal. You can register a business while sitting at home by going to the official website and paying a state fee of 800 rubles.
When creating a business with partners, or having a desire to constantly expand, to work with the state, you need to register as an LLC.
Buying a franchise
Aspiring entrepreneurs shouldn’t start by buying a franchise.
At the same time, there are very few recognizable firms in the real estate business, because most of the companies either exist recently or have not gained popularity. But in most cases, customers do not care about the brand, they care about quality services and a good pricing policy.
Also, the business idea is not so difficult to implement that you need such support as when buying a franchise.
How to open a real estate agency: can you work yourself?
Many entrepreneurs are concerned about the agency’s work. How to work alone and is it realistic, is it possible to do business without an office and are there any benefits to work in an agency?
Can you work alone?
In general, we can say that a real estate agent is already a single work that is not supposed to be performed by a team. Basically, the staff is used to expand the business and increase profits. After all, the client will not constantly wait for the agent to free himself – he will simply go to another company.
One person cannot break loose and cover a large area of the city, all customers and satisfy their needs. By creating a business where only the entrepreneur himself will work, it is impossible to expect to receive large profits.
Ideally, for a business, it is better to hire employees whom the manager can trust and rely on in difficult times. But, unfortunately, business owners, not everyone wants to become agents, and often the search for personnel is difficult. This is because for a whole month you can not complete a single transaction and earn nothing.
For the first months, an inexperienced realtor will not receive any income, which affects his morale. At the same time, the work has a number of significant disadvantages:
- Irregular work schedule.
- Fixed costs for transport and communication.
- Clients are constantly trying to cheat agents.
- Maximum efforts are needed, which may not be justified at the end of the month – the salary will be minimal or zero.
Benefits of working in an agency
If you look at working in an agency from the side of an agent, then there are some advantages. A business such as a real estate agency provides all the necessary materials and support in the work. The firm provides advertising, attracts new customers, pays for transportation and mobile communications.
There is also a stable, minimum fixed salary, which, in the event of a bad month, still remains.
Of course, there is a disadvantage in the form of deductions from a successful transaction in the amount of 10-50%, but the benefits of work override this.
Opening an agency without an office
When an agent who has worked for some time in the company is going to go on a free voyage and open the day, he has a logical question – is it possible to work without an office. Yes, in the first stages, all consultations can be carried out by telephone at home.
If you have a client base, you can work without an office and alone, collecting staff as you expand.
It will be more difficult to do without transport – after all, for a good profit, you need to carry out at least 5 impressions a day.
Purchase and sale transactions
For the company, you can choose a different specialization. You can buy and resell housing or look for clients to rent out to them.
You can also choose a commercial focus – look for premises for businesses, offices, and companies. But there are much fewer such requests and objects than requests for the search for residential premises. This activity can also be made complementary.
Features of the residential market, their purchase and lease
The main nuances of working with the living space market are as follows:
- The market is quite extensive – clients usually buy apartments once or twice in a lifetime, but most have to rent a house and live in it for years.
- The resulting margin per transaction in the housing market may be lower, but the number of inquiries is much higher.
- The demand for the purchase of an apartment or house can fall significantly in times of crisis or an unstable economy, but the demand for rent is constantly stable.
- Usually, buying a property is a serious matter that is not taken in a hurry. But rent is another matter, there are different life circumstances when it is necessary to get at least some kind of housing, and urgently.
When opening a company, you need to choose its direction – it can only be the purchase and sale of housing or only the lease of premises. Or, you can be more flexible and provide a combination of these services. All these questions the real estate agency business plan must take into account and calculate in order to identify the best strategy.
New companies are opening at a rapid pace because a lot of money is spinning in business, which attracts honest entrepreneurs and scammers. Agents and companies, as well as clients, can commit fraudulent actions.
At the same time, the number of victims of fraudulent actions is constantly growing, people, time after time, come across the networks, placed by fraudsters.
Clients often make many mistakes when they decide to buy or sell real estate on their own. Legal ignorance, excessive gullibility play a cruel joke.
There are many fraudulent schemes that, although known, still work great. Most of them are associated with the first stage of a sale or purchase – the collection of documents and their registration. Fraudsters make copies, pretending to be agents, and then try to sell the apartment at a lower price, making ads on the Internet or in the media. The understated price is due to the urgency of the sale, and, of course, there are buyers who will give a deposit. And then the fraudster simply disappears with the money.
Benefits and risks in business
With the proper organization of the business, a real estate agency as a business can become a stable source of income for a manager. But it is necessary to take care of all possible risks awaiting the owner and agent.
In order to profit from the transaction, it is necessary to conclude an agreement with the client, which will restrict the client from turning to many other agencies. But in reality, the situation is more complicated, when the seller posts an advertisement for the sale, he immediately receives a lot of offers from firms to deal with his issue. And instead of choosing one, the client is not at all opposed to everyone taking care of his home at the same time.
As a result, only the agent who can bring the buyer will receive profit. The rest will be left with nothing.
Also, another problem often occurs – the agent brings the buyer, and then they agree with the owner themselves, leaving the agency with nothing.
In general, the situation is stable, but there is a human factor of greed, which strongly affects the work of firms. In any case, it is worth getting lost in insisting on signing an agreement, but if the client does not agree, then it is worthwhile to accelerate and look for a buyer for him faster in order to get his percentage of the transaction.
Speaking about how to open a real estate agency, it is important to understand that the start of the project will take place quickly, this does not require a lot of effort and a lot of start-up capital. The main problems and risks await after the opening. They consist both in finding experienced employees who know how to communicate with clients and conclude deals with them and in developing a client base. In the first couple, the company may not be profitable at all, but thanks to the perseverance of the leader and competent leadership, it is possible to ensure that the company eventually flourishes.