There are several important decisions that will be made when you are opening your own real estate office. One of the most crucial factors in your office’s success, however, is the location you choose. Of course, everyone wants a great office location, but what exactly makes a location great?
Every year, several real estate offices close down. Reasons for this vary; the broker may have been unsuccessful in recruiting, the competition may have been too steep, or, quite frequently, the office location deters agents from joining.
So, if location is so important, why do brokers accidentally place their office in inadequate locations?
You May Not Know What You Think You Know
Imagine: you’re a top producing agent that’s ready for the next step. You are starting your own business and opening a real estate office. You’re thinking about your city and the possible prime locations, ones that aren’t overpopulated by other real estate companies. Your office should have excellent visibility, available parking, and reasonable rent.
After this brainstorming session, you explore the developing area of your city with new, luxury housing, and it’s only a few minutes away from your home! It should be perfect, right?
Maybe not. Your “perfect” location might be a challenging place for your business to grow. Your decision process is on the right track, but there are flaws you may be missing.
Real Estate Agents Don’t Like to Move
To begin, people tend to avoid locations surrounded by competition. However, it can be the best spot for an office. No matter where it is in the city, the competition will remain. The agents you’ll be trying to recruit will be at these offices, and they will likely not be interested in relocating or adding extra time to their commute for your spot.
Think about it this way: the easier the transition, the more likely the agents are to join your team. By having a location near these agents’ offices, one reason blocking them from switching companies is already removed.
For example, consider the fast food industry. Large, successful fast food chains tend to be located in the same general area as each other—occasionally even next door! They don’t stray away from competition, they face it head on and earn from prime traffic locations. Placing your real estate office should be no different.
Transactions Are the Life Force of a Real Estate Office
Another issue with the original location strategy is the expensive housing. New, premium homes are a sure sign of a developing city, however this could have an adverse effect on your agents.
To put it simply, less expensive homes are easier to move into than high-end homes. Real estate offices rely on the quantity of transactions. Your agents shouldn’t be surrounded by high-end listings that they won’t always be able to capture, they should be in an area with plenty of inventory!
Real Estate Agents Want Convenience
Sacrifices will need to be made when you start your own business. No one enjoys driving in rush hour, but if your goal is to avoid rush hour, you could end up placing your business in an insufficient spot.
Instead, try thinking of your future agents. They won’t choose your brokerage because it’s close to where YOU live. They’ll switch to your brokerage if it’s convenient for them.
By choosing a location in real estate saturated area, you will already know that agents are comfortable there, and your chance of recruiting them increases. Best of all, the other real estate companies have already figured out that it’s a high-quality spot!
Control Your Costs
Typically, all business owners would agree that excellent visibility and parking are beneficial. However, the goal is to keep costs low. If you pick the wrong location, you could be stuck with insanely high rent and excessive square footage.
Clearly, high rent is a major issue. While exploring possible options, be sure the lease offers and terms going forward are reasonable. Leases are often in the landlord’s favor, and you don’t want to be forced out of an office due to rising expenses. Moving an office location is extremely expensive and, consequently, could risk the agents you put in so much effort to recruit.
Additionally, a mistake is too much square footage. It may seem wise to find a location with plenty of space for when you’re ready to expand, but it might be biting off more than you can chew. The first goal to work towards is opening your business’s doors, not expanding them.
Instead, look for an available office space with a reasonable amount of space for now and for the foreseeable future. First, base the foreseeable future off the team size you plan on recruiting. Once your real estate business is ready to officially expand, it may be better to open a second location in another area of the city, rather than combining with the unit next door.
Controlling location expenses is something numerous brokers don’t account for and unfortunately end up paying hefty amounts due to it.
There are countless factors to consider when choosing a new office space, but try to remember that you’re looking for the best location for your future team. By selecting a location in a popular area for other real estate offices, you’re able to overcome that obstacle immediately. From there, the key is to choose a location with reasonable rent and an appropriate amount of space for your business plans.
These tips may seem obvious, but time and time again these important decisions are lost in the shuffle and the excitement of starting a new business.By keeping these tips, you will definitely have an increased chance at succeeding in your new real estate venture.