Real estate is an unpredictable business, and it can change based on financial, social, and even natural events. When times are good, new agents flood the market, looking to hit the ground running. However, when times are bad, many agents are unprepared to weather even the most foreseeable downturns. Protecting your business during difficult times can allow you to keep your momentum going, even as other agents are throwing in the towel. Here’s how.
While you may have a head for business and a good grasp of crunching the numbers on a transaction, you need the expertise of a financial advisor who understands tax planning, corporate entities, investments, and other strategies to help you stay on track year after year. If you’re just starting out with financial planning, you may want to meet with your CPA or CFP for an initial strategy session, and then develop an action plan to get yourself on firm financial footing.
2. Focus on long-term gains.
When you have a commission check coming in, you may be focused on paying bills, and then putting whatever disposable income remains into a new purse or a more expensive car. Instead, start thinking about long-term financial goals, including saving up for an investment property or maxing out your Roth IRA. While more frivolous rewards may feel good for a few days or weeks, smart long-term planning will pay dividends for years to come.
3. Understand your annual market timeline.
If you haven’t already, sit down and look at historical trends in your market and in your business. This will help you better anticipate the ebbs and flows of the industry and of your personal income. While there are always anomalies, there is probably a fairly consistent pattern of sales that you can identify. That will help you better predict how much money you need to set aside during the good times and how much you’ll need to get you through the lean times.
If all of your money is coming from client transactions, you may leave yourself vulnerable in the case of a market downturn or economic instability. Instead, develop multiple income streams so that you are better able to shift gears as needed. Consider rent from investment properties, the sale of books or online courses, teaching and training new and existing agents, or freelance staging and marketing consultations.
5. Develop complementary niches.
Look for niches that don’t necessarily flourish at the same time so that you can pivot your marketing as needed. For example, during an economic downturn, foreclosure and short sales become much more common. At the same time, there may be fewer buyers looking to purchase their first home. Then, when the economy rebounds, you may see more first-time home buyers and fewer foreclosures. Develop your expertise in two niches that relate to each other in some way so that you’ll always be able to shift to one or the other, no matter what’s going on in the market.
6. Take on leadership roles in the industry.
One way to ensure that you’re always top of mind for referrals, while also burnishing your professional reputation and credibility, is to take on leadership roles at the local, state, and national association levels. This keeps you in front of your colleagues and helps to ensure you are in on the latest trends and movements in your market and in your industry. In addition, when new leads read your bio or seek out information about you online, they’re sure to be impressed by your status in the industry.
Similarly, by developing content and connecting with media outlets, you can become a leading voice in the real estate community. Write blog posts, make videos, or start a podcast. Teach agents how to develop and grow their business or teach investors how to find great opportunities. By becoming a leading voice in your industry, you’ll put yourself in the way of new opportunities and new connections while raising your profile and digital presence.
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8. Get involved in the community.
You’ve heard the saying “be mayor of your neighborhood.” It simply means that everyone in your immediate vicinity should know you and know that you are a real estate professional. Similarly, the more involved you are in the community at large, the more opportunities you have to connect with buyers and sellers in your area. Work with a local nonprofit, join the historical society, or serve on the planning committee for your community’s annual festival.
9. Develop your referral network.
Do some research and find out where new buyers are coming from when they move to your area. Then, find out where sellers in your area are moving next. Now, start connecting with agents and brokers in the markets you’ve identified so that you can become their primary referral partner. Offer value-added content or incentives to make your services more appealing, along with a streamlined referral process to help cooperating agents connect with you more easily.
10. Consider starting a team.
If you’re looking to increase your professional potential, it may be time for you to start a real estate team. Here are some things to consider as you begin:
- Talk to your mentor or broker and start to formulate a plan and timeline for your team launch.
- Research team structures and find out what type of team works best for your market and for your goals.
- Decide whether you will continue to work with your own clients or whether you’ll develop an integrated approach where all clients are served by the team as a whole.
- Consider what kind of split you will offer and what types of support services you can provide for agents who choose to join your team.
- Develop short-term and long-term goals, and track your team’s progress on a regular basis so that you can ensure you are making the kind of progress you want.
- Develop your own leadership and management style so that you stop thinking of yourself as a single agent and start focusing on how to move the organization forward.