Why are property franchises important?
Real estate is one of the most important sectors of the UK economy. But more than that, it is an essential part of life. The ways in which we live, work, learn and enjoy leisure time are all fundamentally dependent on buildings and how much they cost to buy and maintain. In the UK, the property industry directly employs about a million people and contributes about £94 billion to the UK economy annually. Each year around 50 million more square feet of real estate is added to the pot, worth around £12 billion, and constituting around 1% of the country’s overall GDP.
In addition, property is vital to the success of countless other industries, as well as the health and success of our towns and cities. It creates social capital, creating happier people, and makes us think about more sustainable ways to live our lives. All of which explains why property franchises are both so popular and so rewarding.
Why choose a property franchise?
Property franchises represent an excellent opportunity for the right kind of person to thrive and prosper. With so much money in the industry, forging out your own little piece of it can lead to big rewards. Especially if you do it with the lower risks and support offered by a property franchise opportunity. Many start ups, even in an industry as profitable as property, can find it very difficult to get a foothold, and agencies come and go all the time. This is something you might well have realised yourself when renting, buying or selling property at a personal level.
There is a wide range of property franchise types, which we’ll look at below. But first, let’s take a closer look at why a franchise may be the best option in the property market.
Competitive market place
As it is worth so much to the UK economy and employs so many people, this is not exactly a new market you’ll be entering. There are thousands of estate agents, lettings agents, management companies and more all over the UK. And starting from scratch can be a very difficult job. Which is where having a franchise behind you can help.
A franchise offers:
Support and experience
Ironically, one of the major challenges for any new business is finding suitable property or premises from which to work. Without the necessary skills or know how, locating property in the right place and for the right price can be tricky. So, having support to help you find it and set up shop can be invaluable.
In the early stages, professional training from experienced people is also important. And ongoing support to overcome the challenges facing any new business is also part of the package with any franchise.
Trusted brand names
In an industry as busy as real estate, brand power can really make a difference. Buying property is often the most important decision people will make in their lives, so they’ll really want to be able to rely on and trust those businesses that facilitate the transaction. With the weight of reputation of a franchise behind you, you can eliminate much of the hard work that any new agency has to put in in order to establish this precious commodity. With available branding materials, signage, design and corporate practices, you’ll have a huge head start in the business.
Defined territory
The British Franchise Association has stated that a defined territory is one of the major reasons that property franchises are so appealing. Location is everything in the property game, so being given access to a specific market under your franchise banner is a huge advantage. Property territories can be huge, up to 100,000 homes, and often with the potential to grow and take in wider areas depending on performance. How about that for an incentive to succeed?
Types of real estate franchise
For the most part, property franchises revolve around the selling and renting of domestic and commercial property. Within the real estate agency franchise world, there are five key areas. These are.
Residential sales
This focuses on helping clients to buy and sell residential property for their own personal use. Franchises receive a commission on the sale and so are inclined to get the best price for their client, so it works for both seller and buyer. Helping a young family to find a home, a retired couple to downsize or a first time buyer to make their first step into the market can be very rewarding.
Residential sales are hands on and suit people with a go-getting attitude and ability or prior experience in sales.
Letting
Letting agencies focus on helping people to find property to rent, or finding tenants for landlords. By building up a client base of both landlords and renters, they can match suitable parties resulting in a win-win situation. Agencies make money based on commission for finding tenants. They will be responsible for screening prospective tenants and dealing with any issues that arise during the initial tenancy agreement period.
Commercial
This involves working on transactions with multi-tenant residential properties and commercial buildings. This could either be renting a block of flats or finding suitable businesses for industrial space. Again, they earn commission based on performance. Deals in this area generally are more complex and take longer to set up, but the financial rewards and amounts involved are also more substantial.
Management of property franchises
Of course, not all property franchises revolve around making money from commission on purchase and rental of property. There are other sectors that have an equally hands-on approach but deal more with the management of tenants and properties on behalf of landlords. This involves rental collection and maintenance of property, and may even involve purchase of some property for management in-house or as part of a growing portfolio.
Home staging
This is one of the more unusual property franchises but just demonstrates how much scope there is within the industry. Home staging is when agents hire designers to come in to an empty home and provide temporary furniture to give it a homely look. This helps agents increase the appeal of the property, making it more likely to sell. Statistics show that when a buyer can imagine him or herself in the house, they are more likely to buy.
So, as you can see, there is a lot of scope within the property industry for franchise opportunities. With the support and experience of a franchise behind you, you can enter the marketplace with confidence. Property can be a very rewarding industry and is one that involves working with people, so it’s ideally suited to outgoing and socially minded entrepreneurs.
If you’re not sure what kind of property franchise interests you, then it’s worth doing some research. In a multi-billion-pound sector, there are all sorts of opportunities open to you, and franchises dealing in many of them. Figure out with whom, and how you would like to work, and this will help you make an informed decision about which franchise would suit you best. From residential and commercial letting, to private investment, management and more, there are many options open to aspiring franchisees.