My colleagues and I are fortunate to meet with a great number of independent estate agents up and down the country – some very successful and others a great deal less so. So, what makes some businesses so much more successful than others? Well, the answer to this question quite obviously depends on a great number of factors, such as size, market knowledge/profile, competition, longevity, dynamic leadership etc. However, the one re-occurring feature shared by the most high-achieving management teams is their willingness to explore new/alternative sources of income.
It is an inescapable fact that a large majority of Independent estate agents in the UK, up until only a few years ago, relied on income derived solely from property sales – and for a sizable minority in the UK this is evidently still the case! Of course, history shows that many UK firms expanded into lettings and management over the last 20 years, following the massive expansion of the “buy to let” market, which was both sensible and logical – but with competition rife in this area, is this currently enough?
The key word here is “Profitability” and understanding the difference between residual income i.e. property management, and transactional income i.e. property sales. Residual income is both reliable and constant (albeit often more modest in nature), and transactional income is likely (as the name would suggest) to be “one off”. The costs of running an estate agency are largely fixed in nature i.e. rent, salaries etc, so you would think that finding ways to secure sources of reliable income would be paramount to the successful management of a modern- day estate agency – would you not agree?
So, whether it’s holiday lets, property maintenance, financial services, new homes support, insurance sales etc – if you are an independent agent struggling right now, you need to adapt your business or I am afraid to say that you are likely to slowly die.