How to make a real estate business profitable?
How many bars are on your street? Surely a few, and not all are profitable. The same happens with real estate. A profitable real estate business requires more than a local street and good properties.
In the new entry of our blog, we will examine in detail the conditions that must be met by the real estate business that wants to generate income.
The real estate business: is a real estate company profitable?
Real estate, like all other businesses, can be very profitable. Also as in the rest of the businesses, they must have two premises: a clear market niche and a real estate business plan that guarantees that it will survive the vagaries of the market.
If we stick to the latest data from the General Council of Notaries, the first half of 2018 behaved excellently. And the same happens with the rental market.
What happens with the niche market?
As we have commented on other occasions, in the information society, those businesses that seek specialization are more likely to succeed.
For example, instead of offering all kinds of properties, it would be interesting to focus only on luxury ones, such as the Engel & Völkers franchise.
Another way to specialize in finding a minority target audience and poorly attended, such as rent for tourists, a solution that has been resolved by the international company Airbnb.
What is clear is that no real estate company can survive without a strategic plan for real estate sales.
What does this document consist of?
You must specify in this sales plan everything that will determine the profitability of your business, such as:
- Initial investment. With what capital accounts to deal with the first expenses of the business.
- Web design for real estate. You will have to calculate the initial cost of the design and the maintenance costs.
- Real estate marketing. Did you know that investment in real estate marketing strategies can be one of the most important items of your business plan? We will develop the theme in the following points so that you can be aware of the implications involved.
- Salary of the real estate agent. If you are hiring, calculate the salary of the real estate agent that you can pay with the regional incentives, if there are any.
- Whether you rent it or own it, calculate what it will cost per month, in the form of rent or mortgage. Do not lose sight of the fact that all property needs maintenance, cleaning, small repairs, insurance and renovations if necessary.
- Forecast fund. The real estate market, like all those that are related to consumption, is constantly on the line. The perception of the consumer changes very quickly, and it is important to know that difficult times can come in which you must have a financial cushion that allows you to hold the pull.
How to start in the real estate business?
Although this business plan for real estate is one of the safest steps that bring you closer to having a profitable real estate business, having this document does not guarantee success.
In addition, industry experts identify two key points: innovation and audacity. This has been demonstrated by real estate agents like Gilmar, who for more than 30 years have been betting on these two key points.
Innovation as a differentiating element in traditional businesses
We have reviewed numerous case studies related to the real estate sector. In many of them, we have highlighted the way these professionals have had to take the lead in the market.
This is the case of the local French group JBT. This agency had the speed of detecting the advance of the internet as a way to search for properties.
Thus, they knew how to arm themselves with a good real estate website, with a simple menu that allows users to find the information very quickly.
Like this real estate group, you can also be able to innovate in your business by incorporating technology. Whether in the form of a web or with a real estate software or even using social networks with intelligence. Do not forget that the key is innovation.
How to make a real estate business profitable?
Finally, we offer some recommendations that will help you determine if your business is on track to be a profitable real estate business.
It is not just about having a healthy account and getting more business. In addition, a profitable business is one that increases your brand value in the market.
If you look at the large real estate franchises, they have managed to create recognizable and reliable brands. In a globalized market, where products are increasingly similar, the only thing that differentiates two companies is their vocation of service and their brand.
That is why how well your business is going, it will only be profitable in the long term if you are taking care of your brand.
How to improve the real estate brand of your business?
At the same time that you worry that customers continue to enter and sales continue to be closed. Do not forget that you must take care of the image you provide to the world.
Follow these tips:
- Collaborate with other market agents. If you can partner with other companies or professionals to give a better service, that will help improve the image of your company.
- Offer more for less. We all know that there are aspects of our work more valued and others that are less. Make an estimate of what you spend less time to gain profitability in tasks that require more effort on your part.
- Loyalty always. A happy customer will speak well of you, but a disgruntled customer in the age of social networks is something you cannot afford. Ask your clients for evaluations of your work, as well as write positive reviews on social networks if they are happy with the service provided. This will help spread the word of your good work.
- Create content. Internet is wonderful in some aspects, but it also offers a different face for those of us who work in real estate marketing for social networks. Everybody searches the internet for solutions to their problems, and of course, free. There is no choice but to create content that attracts your potential customers and give it away in a blog or social networks.
- Always rely on a good strategic plan. Although there are many marketing actions that can arise derived from others, if each year you create a strategic marketing plan it will be easier to evaluate it at the end and extract the most important lessons.
- Surround yourself with good professionals. We know that a real estate is a small business, where many times you have to do tricks to make ends meet. However, when it comes to the three fundamental areas of a profitable real estate business (management, marketing and infrastructure) you cannot improvise. Trust professionals who know what they are doing and can help you ensure the success of your company.
Can you tell us how you have achieved a profitable real estate business? What do you think are the keys to your company to reach the top? We wait for you in the comments of this article. Do not fail us!