2020 is not the first time the real estate industry in Australia has suffered a setback. In fact, real estate agents are more used to downturns than most.
When 2020 began, real estate agents were finally dusting themselves off after the effects of the Royal Commission into Banking and looking forward to a busy, bumper year.
Then along came COVID-19. Almost overnight, people lost their jobs in unprecedented numbers and home listings plummeted due to the massive uncertainty. With open homes cancelled and auctions off the menu, all of a sudden any previous downturns look mild.
Right now, we don’t know exactly what we are in for, economically speaking. What is certain is our real estate businesses will all be impacted by the virus in some way.
If you’re concerned about what the future holds, here are some of the indicators your agency will get through ok. The details may prompt you to make some changes.
Low or flexible staff numbers
Ideally, your staff numbers should make up 40-50% of overall costs. If your figures are closer to 55% or more, it may be harder to get through the next few months with all your current employees.
Cutting back staff is drastic but is effective as a cost-saving approach as long as it doesn’t impact customer service too much.
Another approach is to look at how to leverage technology and software to help every staff member be more productive. Is there someone who spends all day entering data when they could be making sales calls? Is time wasted following up leads when this could be automated? A small investment in some digital technology could pay off right now.
Consider upskilling those who don’t generate income to have a more financially impactful position within the business. Another option is to switch some tasks to be handled by freelancers or contractors, so you don’t have the expensive overheads of a full-time headcount. Areas like marketing, content creation, bookkeeping and graphics can all be taken care more efficiently of by someone who isn’t a full-time part of your team.
Skill distribution
Many people in real estate like to specialise but those who have a range of skills will come in handy in 2020.
For example, a property manager with a marketing background can help with efforts to draw in new landlords. A sales executive who comes from the property management side of the business can put their talents to use where needed.
It’s all hands on deck right now so identify the easy wins and get your team to focus on these areas.
Cloud based trust management & property management systems
Right now, some agencies are looking to borrow in order to boost the property management side of their business.
If this is you, it’s to be hoped you have a great backend system which is managed online.
Banks look favourably at agencies which leverage cloud-based technology, keeping their documents and client-based operations online as much as possible.
In the current environment, the cloud allows people to quickly and easily access information without needing to be in the office so now’s the time to switch from paper to digital if you haven’t already.
Operational flexibility
Speaking of the cloud, this technology means people are still up to speed while working from home.
Property managers and admin staff should be able to log in to your systems from home, access relevant information and documents, and communicate with each other without having to be in the same room.
Even sales teams should be able to communicate with their clients from anywhere by using video call and other technology.
Working remotely may not be ideal but if your team can do so without too much trouble, your agency will be better placed to serve clients. It may mean investing in equipment like laptops or WiFi dongles for some staff but this should pay off by allowing your real estate agency to continue to operate smoothly.
Low overheads
There are a lot of ways to cut costs without compromising integrity.
Unfortunately budget cuts are necessary for all businesses right now. Review every regular expense and you may find you are subscribed to some services which aren’t even being used.
Luxuries like fresh flowers in the office or some employee perks may be easy to cut back on, given the current circumstances. You can also talk to your suppliers about reducing your orders or switching to lower-priced products.
Ask your staff for ideas on how to save money. They may be aware of expenses which you have forgotten about and they could also have some good ideas on how to reduce costs without impacting productivity.
Great visibility
Even if you’re making less money, you should still regularly be reaching out to your clients and potential customers.
Now is not the time to eliminate your marketing efforts. In fact, you should be highlighting your amazing services and team more than ever.
If you have extra time on your hands, reach out to some key clients, just to see how they are. Some may actually be in a position to invest right now and will be interested to hear your take on things.
Another great ideal is to reach out to senior industry players or former Principals. They went through the GFC, the recession in the 1990s and times when 10% interest was an excellent deal. Look to veterans for advice and guidance so your agency can hold steady during 2020 and in the years to come.
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