Category Archives: Blog

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Industry experts reveal the hidden costs of establishing your own brand

While having your name over the door can be an enticing prospect, three industry experts say many principals underestimate the financial and emotional costs of establishing a brand. 

And, as it takes time and energy from the core business, principals should consider all their options before striking out on their own. 

Why principals are jumping ship 

Over the past few decades, the franchise model had come to dominate the Australian real estate industry. Many principals joined the big groups lured by the brand recognition and support that came with a long-established name. 

Then the internet changed the rules of the game. As a result, more principals question the franchise system, and look into going it alone. 

After all, nobody wants to pay commissions to head office and surrender a lot of control if they get little perceived value in return. 

Starting from scratch 

Nic Fren, former Real Estate agent and now, founder of Bespoke Media Group, outlined some of the initial expenses principals face building a brand from the ground up. 

“A branding kit complete with logo and colour palettes is between $10,000 and $15,000 to create,” he said. 

“A good website costs a minimum of $5,000. On top of this, comes flags, A-frames, signage, shop front and the like – so it’s easy to see how it soon stacks up.”

All these costs need to be paid before your business turns a dollar. Then it takes at least six months to discover if you are going to get a return on this investment.

And while choosing logos and fonts might be exciting at first, it eats up valuable time and headspace that should be spent winning new clients. 

“The last thing you want to do as a business owner is worry about how your newsletter templates look.”

Time is money 

Tristin Hanna, co-founder of brand and design consultancy Thursday Design, said a brand roll-out can take up to a year to complete, once all touch-points are considered.  It therefore requires a commitment to both time and budget to be delivered effectively.

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Why making more sales in 2021 is less important than you think

Have you got a goal for 2021? If not, let me suggest a goal for you – one that might take you by surprise.

No, don’t aim to make more sales in 2021. Instead, set yourself the goal of making more profits.

Last year was crazy. But it wasn’t completely unexpected – because if you study history, you know crises happen from time to time. Sooner or later, another one will occur. Maybe next year; maybe next decade. Nobody knows. All we know is that another crisis is coming.

So in 2021, whether you’re an agent or a principal, your goal should be to become more profitable. That way, no matter what happens in your local market, your business will be sustainable.

Of course, one way to increase your profits is to win more listings. But it’s also possible to make more money while making fewer sales.

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How switching real estate brands gave me the value I was looking for

Back in 1997 when I first became principal, it made sense to join a long-established franchise group. They provided me with the tools I needed for my business to grow and succeed. And it did, as my agency quickly became one of the leading franchise offices for this national brand. 

But that was then – and the internet has completely reshaped the property landscape in the subsequent years.

Everything’s online. And not just the homes we sell and rent, but also all the technology, systems, forms and documents you need to run your business successfully.

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How to move past your fear and become a principal

Five years ago, I was where you are now. Nervous and fearful about making the step up to principal, even though I had 15 years of being a successful agent under my belt.

But, at nearly 50 years old, this was my ‘now or never’ moment – and I didn’t want to live a life full of regret. So I gathered my courage and leapt.

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The biggest lesson I’ve learned from this crisis

For a moment, I want you to imagine it’s 2019 – back when none of us had heard the term ‘coronavirus’.

It was a golden time, right? Well, no, it wasn’t, it was a tough year for many. My group, One Agency, has more than 150 licensees across Australasia, and when I visited our principals and agents, I saw just how many of them were operating in tough real estate markets.

Some, though, were thriving. Why? Because they’d built businesses designed not for summer but winter.

Fast forward 12 months and those principals and agents are still doing well, despite COVID.

That leads on to the biggest lesson I’ve learned from this crisis: you can never predict what will happen to your local market or the wider economy. So you need to build a business that can do well in any environment. How? By doing these three things:

  • Protect your revenue
  • Minimise your costs
  • Master your mindset

How to protect your revenue

Sales revenue is unpredictable, because you have no control over whether your local market goes up, down or sideways.

Property management revenue, though, is largely predictable, because rents are much less volatile than sales prices and volumes. That’s why every agency with a rent roll is safer.

Big or small, even one-person agencies can build rent rolls – you just outsource the different property management functions to freelance staff. One Agency has businesses of every size, including several solo operators, who do sales while managing more than 50 properties.

How to reduce your costs

You have limited control over your revenue, but you have complete control over your costs.

Remember: it’s not what you make, it’s what you keep that counts. That’s why you need to minimise your fixed costs and take a close look at your variable costs. Some ideas include:

  • Move from expensive main street premises to a cheaper, less visible office, or virtual office – these days, a strong digital presence is much more important than a strong physical presence
  • Send some tasks offshore – outsourcing will not only save you money, it will also make it easier for you to scale up and down when your revenue rises and falls
  • Refinance your debts – interest rates are at record lows, so you could potentially save thousands of dollars per year by investigating current lower-rate loans
  • Hold your group accountable – if you work with a branded group, research the market to see if you can find a group that will give you the same service for lower fees, as there is no such thing as a best brand, only a best operator

How to master your mindset

During my decades in real estate, I’ve learned that the market always turns – for better and worse.

You need to build a mindset that can handle these ups and downs. You can’t allow your mood to go up and down in tandem with the market, because that’s not sustainable.

When the market is booming, you need to remain level-headed; when the market is tanking, you need to remain optimistic.

Have a plan, work the plan and reset as necessary. A strategy with a goal keeps you focused.

So work hard on yourself. Hang out with positive people. Read personal development books. Take care of your physical and mental health. If you’re feeling down, don’t be afraid to ask for help.

Andrew Reeves
Blog, Uncategorized

Your 5-step guide to transitioning from agent to principal

Do you want to step up from agent to business owner? If so, let me explain exactly how to do it. The process is simple, although it does require a lot of hard work and sacrifices.

By way of background, I started my business in 2013; four years later, it was named One Agency International Office of the Year. By the time I sold my business in 2020, it had two offices, 20 staff, 420 properties under management and annual GCI of $3 million. So the five-step process I’m about to share really does work.

First, you need at least five years of industry experience, so you understand the ins and outs of real estate. I had 14 years of experience when I opened my business, although, in hindsight, I realise I could’ve made the jump years earlier.

Second, you need to take advice from those who have been there and done that. An obvious way to do that is to join a group. I think I would’ve been successful if I’d gone out as an independent, but it would’ve been harder and taken longer. By joining a group, I was given all the back-end support I needed, which allowed me to focus on growing my business and maximising my profits. Another thing I did was seek outside support – I used a business coach and a property management consultant to become a better principal.

Third, you need to focus on building a rent roll. A rent roll is the foundation of your business. It gives you consistent income, which allows you to get through different kinds of markets. If you build a rent roll, you’ve always got a saleable asset. It also helps you in your local market, because it means more signs, more marketing and more exposure, which allows you to grow your brand. Whenever you sell a property to an investor, try to turn that buyer into a property management client.

Fourth, you need to remember the saying that One Agency founder and CEO Paul Davies has become famous for – it’s not what you make, it’s what you keep that counts. Profits are far more important than revenue. Always look for ways to minimise your costs, especially your fixed costs. (One reason I chose One Agency was because I didn’t have to pay commissions to head office.) Also, defend your income by building a rent roll.

Fifth, you need to see relationships as a form of currency. Our game is all about relationships, but they take time to build. The more people you get to know, and the more effort you invest in nurturing those relationships, the more clients and referrals you’ll attract.

One Agency Group Blog Why Are So Many Agents Leaving Real Estate
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Why Covid 19 has many agents thinking about leaving

Real estate has long been a ticket to easy money, of course the reality is VERY different.

Being part of a competitive industry that is subject to supply and demand market fluctuations means you have a fluctuating income. And, it can be challenging to stay on top of finances. As much as it is essential to prepare for rainy days, if you are not making a lot of money, this may not be possible.

The onset of Covid 19 and the economic and social implications of lockdown have brought the reality of this home to many.  Whilst some have re-evaluated their career choices and are considering leaving the industry, others took the opportunity to reflect on the way they operate in the industry.

While some people think that Agents keep every $ of commission they receive, the reality is very different. Whether you work within a franchised office, as a sole trader, or as a Principal, there are costs-for-doing business, and fee split responsibilities.  Whilst researching my book ‘How to Profit in Real Estate Business Ownership’ I found the cost to run many offices is as much as .90c in the dollar, leaving little margin for a rainy day.

During the lockdown period I spoke with many agents and business owners.

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They sold it through Jo Vines

There is no stopping Coffs Harbour’s Joanne Vines, even after twenty years in the real estate business. Learn her secrets to success.

As any resident will tell you, there is so much more to Coffs Harbour on the Mid-North Coast of NSW than its famed Big Banana. As well as being a popular tourist location, the town is home to 70,000 passionate locals. The number is set to grow, with close to 10,000 new residences and 20,000 more people expected to join the local population by 2036.

Many Sydneysiders looking for a seachange are choosing Coffs because it boasts the most moderate climate in Australia, as well as its beautiful beaches, stunning hinterland and diverse wildlife. Property-wise, prices have climbed steadily since 2011, reflecting Australia’s collective obsession with owning a little piece of paradise by the sea.

For One Agency Group’s Joanne Vines, Coffs Harbour is home. Having moved to the area as a young parent, she originally worked as a dance teacher before switching to real estate. “My neighbour worked in real estate and encouraged me to consider it as a career. I’m glad I did!” says Joanne, who joined the industry 20 years ago.

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8 key habits to help your business

As the end of the year draws closer – or rushes towards us, as it sometimes feels – I thought I’d share with you eight key daily habits that I find helpful in business.

Sometimes, in the rush of dealing with your to-do list, chasing clients and finalising projects, it’s hard to establish daily habits that will make your working life more enjoyable and productive. But in my experience, it’s worth it. Read on for the eight key habits of successful people that are easy to apply to your own work day.

1. Create a Big Audacious Goals list

Having a list of big-picture goals will keep you focused and positive when you find yourself sweating the small stuff. What is truly important to you? What would you love to achieve with your work? Knowing what this is, and writing it down, will not only help it to actualise, it will also give you focus and clarity. Look at what you want from your work, what you want from your life. Are your to-do list and daily life speaking to these Big Audacious Goals? If not, look at how you can adjust things so that they are.

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Keeping it in the family

Fate has played a big role in Tina Lee’s career as a real estate agent.

With a background in insurance and sales, Tina left her home of Hong Kong in the mid-nineties and relocated to Sydney to raise her family. Once her youngest reached high school, she came across an advertisement while browsing the local newspaper.

The ad invited readers to find out more about the real estate industry. With strong sales and management experience, Tina had nothing to lose. “I was ready to go back to work and I liked the idea of selling something tangible,” she says.

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In for the long haul

2019 has been an interesting year for real estate professionals across the board. A number of factors, including the Hayne Royal Commission and a looming election, meant the hands on the Property Clock dropped to six (i.e. buy, don’t sell) in many areas.

Those who have been around for a long time have witnessed the cycles of the property market before. For the uninitiated, it can be difficult to weather the storm of a downturn, especially after Australia’s boom period following 2012.

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8 ways to grow your real estate business in Australasia

When you’re starting a new business or trying to build your existing real estate business, it goes without saying: it’ll take time and perseverance. But not much of it comes down to ‘luck’, so here are some of our tried-and-true tips on how to make sure that whatever you put in, you’ll get back in success and profit.

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A success story in Singleton

The town of Singleton in the NSW Hunter Valley has an interesting cross-section of property and people.

Of the population of around 16,000, many find work in the mining industry. However, locals are quick to point out that Singleton is far more than a mining town. Having the vineyards of the Hunter Valley on their doorstep, a large nearby military base and many agricultural families using ‘Singo’ as a base means there is always someone different to talk to.

Property-wise, Singleton has had its ups and downs, most recently after the mining industry experienced a downturn in 2012. Between then and 2014, prices took a tumble by around 20 per cent.

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Why you need to be up to date with AI in real estate

After decades seeing artificial intelligence in sci-fi films, it seems like the dawn of AI in everyday life is finally here.

While this might seem daunting at first, the possible applications of AI in real estate can actually make the job of an agent easier, more efficient and more productive.

Will AI replace real estate agents? Only in a very poor way. The art of selling a home is about connections and human skills, so the best salespeople have nothing to worry about ‒ only something to gain.

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Is a real estate business partnership right for you?

How you structure your real estate business is something you’ll need to think about early on.

Some agents find that a business partnership is the right choice as an alternative to going solo. You share the workload, the risk and the profits. And if you choose the right partner, you can balance each other out, and even share a few laughs along the way! One partner might be better at client communication, for example, while the other might be better dealing with numbers and book-keeping. A partnership is also less lonely than working alone, so might suit extroverts better than a solo operation.

 

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Why no office is a good office

If you’re taking the plunge and setting up as an independent real estate agent, you’ll know too well that there are significant costs involved. Not just financial costs, but also endless amounts of energy required to get established and build on your ideas and brand.

One question that often comes up is whether or not you should open a bricks-and-mortar ‘shopfront’ – and invest all the time, energy and money (rent, phone line, electricity, equipment, renovation) that entails?

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Partner with a mortgage broker for better success

It’s a problem for home sellers and real estate agents all across Australia. You think you’ve found a buyer, but when it comes time to close the deal you find out that they haven’t been able to sort out financing so it’s back to square one.

This sort of disappointment is one that can be avoided with the right people on your team, which is why you might want to consider partnering with a mortgage broker.

What can a mortgage broker do for you?

Homebuyers have several options for sourcing the funding for their home loan, but none so specialised and personal as a mortgage broker.

A broker will sit down with your client and work out what they want, the loan-servicing capacity and what the most appropriate way to get it will be.

Part of this will be about finding the most suitable lender, but the broker will also look at the buyer’s finances as there might be ways to make them more attractive to lenders. For example, as a general rule, every $10,000 an applicant has in available credit card limits reduces their borrowing capacity by $35,000.

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Queen of the ‘castle

As a standout sole operator in the Newcastle region, Annette Pinkerton has a few tricks up her sleeve.

First, with an extensive background across radio, television and newspaper plus qualifications in marketing, she understands the techniques to draw people in to an open home and the importance of good advertising.

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Why women and singles might be your best clients

With an ageing population in Australia, one in four Australians now live alone, and these people are more likely to be women. Additionally, young women are now more likely than young men to be looking to invest in their first home and secure their financial future.

For real estate agents, these clients are worth keeping in mind when building your business. Many of these buyers or sellers might need to downsize from a large family home, or find a suitable home close to work and public transport. Others might be looking for financial advice or help with finding a mortgage for their first home. Our existing housing stock still needs to catch up to this new reality, along with our marketing strategies.

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Why you shouldn’t mention ‘integrity’ in your profile

Most of us will have been to job interviews where we were asked to provide an example of a time we showed initiative, took responsibility or exhibited leadership abilities. This is because simply listing ideal attributes for a role is not enough.

And that’s why mentioning ‘integrity’ in your agent profile is rather pointless. Because what real estate professional doesn’t declare that they personify this attractive attribute? You’ll only sound like the next salesperson trying to win clients.

But that doesn’t mean it isn’t a very important aspect of your role as an agent. It’s just about approaching it from a different angle. The saying, ‘Actions speak louder than words’ is what it comes down to with integrity ‒ as it is better to prove, through the things you do, that integrity is a trait you possess.

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On track in Colac

“All-rounder” is one way to describe Merryl Hilton, who starts her days in gumboots at the dairy farm run by her husband and ends it in heels as a popular Colac real estate agent.

After being involved with property all her life, Merryl relocated to the regional Victoria area around 15 years ago. She took on a One Agency licence in 2017.

“My mum collected houses,” explains Merryl, “And there haven’t been many times when I haven’t had an investment property as well as my own home.”

For Merryl, the experiences of being a real estate agent and One Agency licensee have been nothing but positive.

Country strong

Unlike many regional areas, Colac is a thriving locality. It serves as a hub for surrounding dairy farmers and is home to several thriving manufacturing businesses as well as Bulla Ice Cream and the Australian Lamb Company. Although house prices have climbed steadily since 2010, rising in value by over $100k, the area is still affordable, with an average price of just over $300k, according to realestate.com.au.

“We have great employment plus good schools and healthcare,” says Merryl, “House prices are good, there are investment opportunities and rentals are amazing.”

Merryl offers property management as well as home sales. She has one and soon-to-be two full-time real estate agents on her team.

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8 factors increasing confidence in real estate markets

The housing market across Australia has been going through a downturn recently, but there’s real confidence returning to the real estate market.

Below, I’ve listed eight reasons why I believe that the Australian property market outlook is positive and why real estate agents should be planning to take advantage of this change.