You can start a good commercial real estate business if you focus on specific property knowledge, people, and the marketing systems to get the right message into the local area. As to how large the ‘local area’ should be for you is a question that really depends on the skills in your office and the number of people available to cover the area.
You cannot individually cover a huge area with lots of properties; the only way you can cover a large area is if you specialise in a specific property type such as ‘hotels’ where the number of properties are few and the geographical spread is large. So be realistic with your coverage expectations. Divide your town or city up into zones where individual agents can get to know the property owners, the streets, prices, rents and enquiry.
Here is a basic plan to help you start your commercial real estate business:
- Knowledge – Without property knowledge and specifically that knowledge relating to commercial, you will find that the local business owners and investors you talk to will see through your ‘weaknesses’. It is the nature of the industry that property investors know what they are doing with property and how they are to improve the process; they expect the agents that they work with to have the right knowledge to help them do exactly that. Don’t attempt to enter the industry without taking the time to learn the facts, the property market, and the strategies to make things happen.
- Research trends – Understand what has happened locally in prices and rents over the last few years. Also seek out the facts of supply and demand relating to the segment today. Given that the industry moves through cycles look for the next opportunities coming up in sales, leasing, and property management.
- Property types – When you work with differing property types, the facts of prices, rents, incentives, time on market, enquiry rates, and marketing strategies will all be different. Track those trends so that you can quote current market conditions efficiently and accurately. Some agents will only focus on office, industrial, or retail given the volume of listing stock that is available. Make your choice with regard to the growth potential of the property segment, and then look at the levels of competition that you will be up against locally.
- Time of year – There will be seasonal peaks and troughs that apply to your industry in your local area. They will be impacted by business activity, climate, investment pressures and local property enquiry. Review the seasonal sale and leasing results over the last few years; you will soon see the good and bad times for listings and commissions.
- Marketing systems – Our industry is largely one of personal contact and professional service. That means you will need to know a lot of people in the categories of property investment, development, and business operations. Your marketing systems should support you in getting in front of new people in a consistent way. Today those marketing systems will be diverse including database, websites, blogs, social media, direct mail, cold calling, and door knocking to name a few of the big ones. All of these marketing processes should be integrated into your personal marketing plan.
From this preparation work you will be ready to take action and build your business profile as a commercial real estate agent or brokerage. It takes time to get the right connections and systems around you, however stay organised and focused, the results will come to those people that commit to the industry professionally.