Dream Team

If you’ve never crafted your own real estate business plan before, doing it for the first time can feel especially overwhelming. The good news, however, is that if you include certain things in your plan, and construct your plan in a certain order, you’ll have no problem creating something that fits your business where it is — and prepares you for growth next year.

When you’re creating your real estate business plan, make sure you include the following, ideally in this order.

Market assessment

The most perfectly crafted real estate business plan won’t get you anywhere if it’s focusing on the wrong part of the market, an area where a business is going to contract instead of expanding — unless you have a very specific plan to capture more business regardless. But to make that specific plan, you’ll need to know where the market is, so even if your ultimate goal is to swim against the tide, start by pinpointing the tide itself.

Take a look at the past year (or, ideally, two or three years) of sales in your area. Look at price points, location, days on market, and see if you can identify or pinpoint any trends. Did luxury sales look stronger than normal last year, and why do you think that could be? Did price growth suddenly start to soften around entry-level homes?

When you know who is buying and selling which homes in your area, what they like and what they don’t like, and what they’re willing to pay or to list their homes for, then you’ll have a good idea of how you can fit into that mix and provide services to those buyers and sellers.

Mission

After you’ve assessed the market, take some time to think about what inspires you in your day-to-day life. There are probably some moments you’ve experienced in your career that make you feel like all your effort and hard work paid off in a rush of reward and accomplishment. If you think about those moments and try to identify any common denominators or features they each hold, what might those be?

You could realize that you feel most fulfilled when you’re handing keys over to a single parent who’s working on building a stable life for a family on a single income. Or perhaps you get that rush helping an elite seller offload a property discreetly, quickly, and for a sizable amount of money, earning their praise and referrals.

Why tackle the mission after the market assessment? Truthfully, you could do either one of these exercises first; if you do the market assessment first, however, then your mission is likely to be at least a little bit more actionable in the current real estate environment.

SWOT analysis

The acronym, if you’re unfamiliar, stands for “strengths, weaknesses, opportunities, threats” — and this is a critical analysis to complete for your business plan if you want it to be competitive. Start with your strengths: catalog where you know you do well and count those as assets. Be equally thorough and even more brutal with weaknesses, though.

Next, look back at your market assessment and think about the opportunities and threats that you think will be most important to have on your radar in 2020. Maybe one area of your business or one method of lead generation that was important to you seems to be drying up; in that case, you definitely need to mark that as a threat. On the other hand, perhaps a new industry opening up in your area or a chance meeting with a developer who wants to work with agents could be a sweet new opportunity for you.

Goals

You’ve got the foundation built for your real estate business plan; now it’s time to put an actual, well, plan into action by setting some goals. The work you’ve done on the market assessment, your mission statement, and the SWOT analysis should give you a good framework for where you should make goals in your business to help drive you forward and what, exactly, those goals might be.

For example, maybe a combination of new industries emerging in your area, a new network connection into some new condo developments, your own assessment that condo sales are climbing while single-family home sales are stagnating, and your age and technology savvy all lead you to believe that there’s a big opportunity in condo sales and that you could be the person to tap it. Perhaps your goal will be to close a certain number of condo sales this year or to double the amount you did in 2019.

It’s a good idea to build a few different goals around different areas of your business so it’s not all about production. Think about the financial and lead-generation goals you want to meet, of course, but also consider operational goals like hiring an assistant, or lifestyle goals like being able to take two weeks of vacation in 2020 without things going haywire while you’re away. You can even use this opportunity to set health goals, relationship goals, anything else you want to work on next year; after all, your work is part of your life, and if one of your work goals is to give yourself more spare time and energy to spend with your loved ones, that’s both admirable and doable.

Strategic plan

Your strategic plan is essentially your road map from getting from where you are today, your current state of affairs, to reaching or passing your goals. This is the part of your plan where you break your goals down into actionable steps, giving yourself a clear pathway to the end of 2020 and the successful completion of every single one of your goals.

One effective way to do this is to look at the gap between where you are today and where you want to be, measure how wide the gap is, and assess the best way to bridge it. If you wanted to run a marathon, you’d know that you have to start running every day, so “run every day” would probably be on your list of things to do to accomplish that goal, along with “register for a marathon” and “buy running shoes.”

Schedule

Taking the marathon analogy to the next level: When you start training, hopefully, you would know better than to try to run twenty miles on your first day. You want to build up to running those long distances, which means you first need to acclimate yourself to running shorter distances.

With your goals and strategic plan in hand, think about your schedule and how you’ll time those incremental steps toward your goals. Don’t forget about seasonal or annual commitments that might make things easier or more difficult for you at different times of the year and then plan accordingly — your future self will thank you for your thoughtfulness.

Budget

You need to spend money to make money, so the saying goes, and that’s definitely true in real estate as much as any other industry. But that doesn’t mean you should be spending indiscriminately; in fact, you should actually be setting a budget for these goals and then doing your best to come in under that budget if you possibly can.

Make sure you are paying attention to the budget in your business plan. Outline how much you will spend upfront and then reinvest in your lead generation system, how much you will save for business expenses, how much you will reinvest for retirement — if it’s money-related and you have a goal tied to it, but the budget in your business plan.

Marketing

You’ll have to market yourself as an agent in addition to marketing your listings, although those tasks can take different priorities in different years. So think about your marketing goals in 2020 — even if it’s only to automate what you’ve been doing, or delegate it so you don’t have to think about it anymore. Have you already put those into your business plan? What else might you need to add to help actualize the rest of your goals in terms of marketing?

Systems and processes

Outlining the systems and processes that you’ll use daily in your real estate business plan might seem like overkill, but on the other hand, if there are things that you’re doing at a very practical level and on an extremely regular basis that don’t entirely align with your goals and your mission … don’t you want to know about that as soon as possible so you can make some changes?

The other advantage to outlining systems and processes in your business plan is so that you fully understand what you are personally handling and what you’re outsourcing, and you can decide when it makes the most sense to either delegate further, outsource, hire an assistant, or whatever you need to do so that you’re able to reach your end goals.

Executive summary

This is the part of your business plan that sums everything up, exactly what it sounds like. Why is it necessary? Well, if you need to remind yourself in a sentence (two, tops) what you’re doing, for whom, and why, the executive summary does that perfectly. You can even use that structure to create it, and if someone asks for your elevator pitch, you’ve got it down to a single sentence — impressive!

Check-ins

Some agents create a real estate business plan and then never check it again until it’s time to make next year’s plan … which might as well look a lot like this one, if not identical because you never implemented anything. Look at your goals and your schedule, then decide how often you’re going to pull out your business plan to review it and see how you’re pacing. Weekly? Every other week? Every month? (That’s probably the longest you want to go, realistically.)

If you’ve had difficulty sticking to a plan in the past, give yourself shorter time periods between check-ins so that you can self-correct more quickly when you have to. And if you find that you’re hitting some goals more easily than others, you can always stretch out those check-ins so that you’re only focusing on where you need improvement.

Your company is growing and it’s time to move into a bigger, or maybe even a different space to meet the daily needs of your workers. The biggest question on company leader’s minds, “should we rent or buy commercial office space?” The answer, of course, depends on many factors — here is a guide to help you decide which path to explore further:

Why you might consider leasing

You’re not ready for a long-term investment. You haven’t found the perfect property to invest in for the long haul, or maybe you’re not ready to make a long-term commitment. It’s also a time and emotional investment —Owning real estate is a distinct, non-core business that will require your time, knowledge, and resources. Not having to worry about this frees you up to grow your business.

Tax benefits. Come tax time, you can deduct your lease payments and other rental expenses.

There’s no down payment. Investing in an office space, you have the benefit of a lower upfront capital investment. When you invest in an office space, you’ll need to factor in a large down payment, anywhere from 10 to 30 percent. When you rent, you’ll only need to pay a deposit that’s usually equal to one month’s rent, or first and last month’s rent.

Keeps your cash-free. When you rent a commercial office space, this will free up more cash in the short term for you to invest back into your business or use for working capital.

No-fuss maintenance. Depending on your rental terms, your property owner will likely be responsible for building maintenance and repairs. You’ll likely be responsible for keeping your office space clean and kept. Note, this could also be a deterrent depending on how quickly and efficiently the owner responds to any of your concerns.

A nicer space than you might have access to. It may be too costly to purchase an office facility in a high-end area, but with renting, you could have access to that high-end property you have your eye on for less money than if you purchased.

Flexibility. Leasing offers a variety of flexible options. You’ll have the option to choose a lease term that fits your company’s needs, the flexibility to grow or contract for both the short and long term, and the flexibility for an easy departure at the end of your rental period if you choose not to renew.

Why you might consider purchasing

Building equity and your brand. When you purchase a commercial space, you’ll be able to build equity. The longer you stay, your cost of ownership goes down on an actual cash basis. You can eventually use this equity as collateral if you decide to expand your business. Should it ever come time for you to sell, you could also make a nice profit. This may also create favorable perceptions in your market as your company is viewed as a stable player.

Increased cash flow. You can take advantage of low borrowing costs if you’ll be the owner-occupant. If the commercial space is large enough, you can rent out extra office space for supplementary monthly income.

Tax benefits. You can deduct interest payments on your taxes. Unlike a lease, you won’t be able to deduct your entire monthly payment, but you can deduct your mortgage interest expense.

Avoiding rent hikes. If you lease, your rent is likely to increase at renewal time particularly in high-demand neighborhoods, whereas if you purchase, your month-to-month fees will eventually decrease over time.

Design your own amenities. With a lease, you may be limited, or even restricted to the amenities you can offer your employees. With ownership, you’ll have greater control over the space and be able to scale and grow as your business expands.

You’re in charge of maintenance. While this could also be considered a point against purchasing, if you’re responsible for maintenance and repairs, you’re in control of how quickly you can make the repairs and get to control the vendors you use instead of being limited to previously approved vendors with a property management company.

Predictability. With a lease, the building owner could change hands at any time. With a change of ownership comes unpredictability in many things like rental fees, amenities, and terms if you were renting. If you take out a fixed loan, your costs will remain steady and your monthly payments will never increase during the finance period.

Your company is growing and it’s time to move into a bigger, or maybe even a different space to meet the daily needs of your workers. The biggest question on company leader’s minds, “should we rent or buy commercial office space?” The answer, of course, depends on many factors — here is a guide to help you decide which path to explore further:

Why you might consider leasing

You’re not ready for a long-term investment. You haven’t found the perfect property to invest in for the long haul, or maybe you’re not ready to make a long-term commitment. It’s also a time and emotional investment —Owning real estate is a distinct, non-core business that will require your time, knowledge, and resources. Not having to worry about this frees you up to grow your business.

Tax benefits. Come tax time, you can deduct your lease payments and other rental expenses.

There’s no down payment. Investing in an office space, you have the benefit of a lower upfront capital investment. When you invest in an office space, you’ll need to factor in a large down payment, anywhere from 10 to 30 percent. When you rent, you’ll only need to pay a deposit that’s usually equal to one month’s rent, or first and last month’s rent.

Keeps your cash free. When you rent a commercial office space, this will free up more cash in the short term for you to invest back into your business or use for working capital.

No fuss maintenance. Depending on your rental terms, your property owner will likely be responsible for building maintenance and repairs. You’ll likely be responsible for keeping your office space clean and kept. Note, this could also be a deterrent depending on how quickly and efficiently the owner responds to any of your concerns.

A nicer space than you might have access to. It may be too costly to purchase an office facility in a high-end area, but with renting, you could have access to that high-end property you have your eye on for less money than if you purchased.

Flexibility. Leasing offers a variety of flexible options. You’ll have the option to choose a lease term that fits your company’s needs, the flexibility to grow or contract for both the short and long term, and the flexibility for an easy departure at the end of your rental period if you choose not to renew.

Why you might consider purchasing

Building equity and your brand. When you purchase a commercial space, you’ll be able to build equity. The longer you stay, your cost of ownership goes down on an actual cash basis. You can eventually use this equity as collateral if you decide to expand your business. Should it ever come time for you to sell, you could also make a nice profit. This may also create favorable perceptions in your market as your company is viewed as a stable player.

Increased cash flow. You can take advantage of low borrowing costs if you’ll be the owner-occupant. If the commercial space is large enough, you can rent out extra office space for supplementary monthly income.

Tax benefits. You can deduct interest payments on your taxes. Unlike a lease, you won’t be able to deduct your entire monthly payment, but you can deduct your mortgage interest expense.

Avoiding rent hikes. If you lease, your rent is likely to increase at renewal time particularly in high-demand neighborhoods, whereas if you purchase, your month-to-month fees will eventually decrease over time.

Design your own amenities. With a lease, you may be limited, or even restricted to the amenities you can offer your employees. With ownership, you’ll have greater control over the space and be able to scale and grow as your business expands.

You’re in charge of maintenance. While this could also be considered a point against purchasing, if you’re responsible for maintenance and repairs, you’re in control of how quickly you can make the repairs and get to control the vendors you use instead of being limited to previously approved vendors with a property management company.

Predictability. With a lease, the building ownership could change hands at any time. With a change of ownership comes unpredictability in many things like rental fees, amenities, and terms if you were renting. If you take out a fixed loan, your costs will remain steady and your monthly payments will never increase during the finance period.

Since the real estate bubble burst, people all over the country have started doing more with fewer houses. Here are a few simple tips for getting the most out of your humble abode.

Use walls and ceilings.

Optimize your floor space by getting as many things as possible off of it. Hang your bicycle from the wall or ceiling. Install shelves for books and other items over doorways and, if possible, in walls themselves. Use the space above your kitchen cabinets for unused appliances, empty boxes, and china sets. Take advantage of corners, which are underused and provide a lot of storage space if used properly.

Brighten things up.

The more light you let into a room, the more spacious it will appear. If you have access to natural light, take advantage of it with sheer window curtains. If not, be sure each room is well-lit with lamps, chandeliers, and sconces. When it comes to painting, darker shades tend to impose on space. Instead, opt for lighter, softer shades, using bright colors sparingly as accents.

Use multi-function furniture.

Instead of that big wooden coffee table and bold, angular couch, opt instead for chests, sleeper sofas, ottomans and benches with interior storage space, etc. Use collapsible or nested end tables that can be folded or tucked away when necessary. Stick with vertical bookcases and push larger furniture pieces against the wall to avoid breaking up open space.

Take advantage of the outdoors.

Keep your lawn trimmed and your flowerbeds neat to avoid feeling crowded out by overgrown landscaping. Expand patios and hardscapes and install a grill to extend your kitchen and dining areas. Relieve the congestion in your garage with a tool shed or sheltered area for recreation equipment.

Anyone who’s bought or sold a house before is already aware that the right agent can make a big difference in your experience. But what about the brokerage where the agent is affiliated — does the brokerage involved in your home transaction really affect you as a consumer?

Brokerages can provide different services for buyers and sellers. If you’re selling a house, here are some of the things you can (and should) expect from many brokerages.

Marketing

One of the most important things that a brokerage does for sellers involves marketing their listing, letting qualified buyers know it’s available and providing the information those buyers crave in sleek and lovely presentations. Spend some time looking up homes in your neighborhood on Zillow and take a look at some of the photos and listing descriptions. You’ll probably be able to tell pretty quickly which real estate agents invest in staging and photos, and which ones try to skate by with smartphone snaps. Some of that has to do with the individual agent, but some brokerages have standards and parameters around what needs to be done to promote listings.

Education for you

Most people don’t sell a house every day — or every year, or twice a decade — so there’s a lot you might not know or remember about the process, and it’s part of your agent’s job to help educate you about the gaps. The agent’s brokerage can play a part in this, too, by providing resources and potentially even classes to help get you up to speed. You might not think you need to learn anything about selling a house, but at the very least, it’s helpful to get an idea of what the market is doing so that you aren’t surprised at the price agents to suggest when you start interviewing them.

Education for agents

The licensing requirements for real estate agents vary in every state, but each state requires some basic education in addition to continuing education as the years’ pass. Those are baseline requirements that might not cover everything an agent realistically needs to know to do business in your market, from legal restrictions to negotiation best practices. Some brokerages prioritize education for their agents more than others, providing seminars, webinars, reading materials, regular meetings, and other resources to make sure their agents know what’s new and what’s critical.

A network of buyers

One of the biggest reasons why a seller would want to use a real estate agent in the first place is because agents can help expose your home listing to a broad section of buyers who are qualified to buy your house and interested in your specific dwelling. This is why listing your home as a for-sale-by-owner can be risky — you don’t have access to the agent and brokerage networks of buyers. Some brokerages offer “coming soon” programs, where registered and qualified buyers can learn about homes that match their criteria. Others are part of independent or franchise networks that stretch across the country, so you can even reach buyers moving to your area.

A network of mortgage and title pros

Just like real estate agents, you’ll find a wide variety of mortgage and title professionals who specialize in different things. If you want a jumbo loan, or you’re purchasing rural property, or a condo or you don’t have a full down payment — all of those are situations where you might want to consider using a specialized mortgage broker who can give you a full range of options. Similarly, there might be idiosyncrasies with your home loan or liens on your house that require a qualified title professional to parse. You probably don’t know how to find these people, but your real estate broker will, and they’ll also know which mortgage and title operatives are responsive and helpful, and which ones sometimes take a shade too long to respond to your needs.

Processes and procedures for the transaction

Home sale transactions are complicated beasts, legally and financially and even emotionally. Some brokerages have streamlined processes outlined that their agents are supposed to follow to make the transaction easier for everyone, while other brokerages don’t oversee the transaction quite as much. Some brokerages also have administrative staff to help their agents with some of the transaction details, which can make a big difference to you as a seller because you might have a designated point person in the office to help keep you updated on your sale.

Help packing up and moving in

Not every real estate brokerage is a concierge brokerage that will help you dot all the I’s and cross all the t’s, but if that’s something you think you might need, then there are brokerages who will offer help with absolutely everything to do with your move. If you’re staying in town, they’ll arrange for movers to come to pack your things and transport them to your new home. Some brokerages also contract with a handyperson they book to come over to your new place and make any small fixes or adjustments that you’ve noticed a week or two after you move in. Others will provide help setting up your utilities and changing your address. As you probably know, when you’re in the middle of moving and selling your house, every little bit of help can make a big difference in your experience.

Neighborhood events

Brokerages at their best are community resources, and real estate brokers are people who know everybody. Some brokerages offer community events every now and then, such as summer barbecues or Fourth of July fireworks, harvest festivals in the fall, holiday celebrations, Easter egg hunts — the list goes on. If you’ve worked with brokerages established in certain neighborhoods, these events can be an excellent way for you to meet your fellow residents and mingle a little bit.

Ongoing information

When it’s 9 p.m. and you need an emergency plumber, or your electricity goes out on Christmas Day, do you know who to call? If you don’t have a contractor on hand already, talk to your real estate broker about people they recommend. They’ll know people who can paint your house, pave your driveway, fix your water heater, or install a fence, and they’ve probably also heard all of the stories around town about every contractor, so you can save yourself some time and headaches by just starting with your brokerage first.

Most sellers don’t think about their real estate brokerage in terms of a resource, but the best agents affiliate with the best brokerages for a reason. If you aren’t sure whether it will make a difference if you list with one brokerage over another, do a little bit of research into what they offer sellers and compare them to ensure you’re choosing the best brokerage (and agent) for your home sale.