Australia is expected to see continued growth in property prices over the next few years. This is particularly true of the country’s capital cities. The real estate sector, therefore, is a great option for would-be entrepreneurs.
Read on to find out what type of real estate agency you will be best suited to, the legalities you should be aware of and the skills that you need to succeed.
Facts and stats
- This year, Melbourne is enjoying a strong property price recovery while Sydney property is recording the fastest rebound in decades.
- This is fueled by a combination of easier access to credit and lower interest rates and is expected to bring more buyers back into the market.
- In 2020-2021, Australia’s housing prices across capital cities are expected to grow.
- The Australia and New Zealand (ANZ) Bank has revised their forecasts for house price growth over the next year and now expects overall property prices to rise nearly 6% in 2020 (compared to their previous forecast of 3%.)
- Forecasts for the three major eastern capitals are expected to see price gains in the 5-10% range, Brisbane outpacing slightly over the full year.
- SQM Research’s annual Housing Boom and Bust Report forecasts an even stronger price growth, “suggesting that most of Australia’s capital cities will benefit from the interest rate cuts and loosening of credit restrictions.”
- Of particular importance, the Australian real estate market was one of the few markets worldwide to weather the Global Financial Crisis without a significant drop in value and has seen consistent growth since records began in 1880.
Let’s take a look at what types of real estate businesses are thriving and what you need to know before becoming the owner of a real estate company. Determine which type of real estate company you want to buy, and consider these advantages to buying an existing real estate business:
- Having instant access to good leads or an already existing rent roll income.
- Accessing many listings with the purchase of a turnkey real estate agency business.
- Utilize the equipment already in place.
- Benefit from current excellent staff and systems as part of the purchase.
The ins and outs of real estate agency ownership
Online visibility - Thanks to the Internet, your real estate business’s physical location has become less important, and so too has passing foot traffic. Your website is of utmost importance and is your foremost lead generator and will be the 24/7 public face of your company.
Know your market - Because of Australia’s comprehensive range of opportunities for property buyers, from family homes, duplexes, townhouses, terraces to apartments ... from inner-city to suburban to rural locations, your options are broad.
Know the legal requirements involved
As you take the necessary steps to purchase your real estate agency, are you considering the legal requirements involved?
- Be sure the officer in charge holds a “licensee-in-charge” and is responsible for the agency’s conduct.
- Know the qualifications for each of your salespeople. These staff members work under the licensee-in-charge who directly supervises them.
Consider your challenges
Listen to the right advice - Don’t be swayed into some common industry systems that, even though they produce results, only generate low profits.
Your success level - Do you know how to successfully list and sell real estate? Can you sell enough property each month to bring in a profit?
Prepare a business plan - Understand expenses, fixed and variable. Also, understand the difference between “fat and muscle” expenses.
Know your capital - Do you have cash sufficient for three months, until you receive a regular flow of settled sales? Have you fitted out and set up within the budget?
As a new or expanding business owner, you need to emulate these must-have skills:
- Your sales should always reach a minimum standard, set and decided by you.
- Your team needs to perform how you want them to perform, where they all reach or exceed their targets.
- You select and achieve your profit level.
- Your agency continues to be profitable without you having to make sales.
As you purchase your real estate agency, remember that this industry needs leaders, managers, and salespeople, your revenue producers, to continue profitability. Are you ready to find the business that will help you build a business that will take you to the next level of success? Click here to extend your search beyond real estate agencies.