Is a property franchise a good investment in this market?

Vincent Anthony writes:

The property market has wide appeal because it is relevant to everyone: we all need somewhere to live!

Recent events resulting from the pandemic have proven that property is a market the government is keen to protect in all economic circumstances. To keep people moving, stamp duty was temporarily shelved, and then more recently, further adjustments to stamp duty were made, given the rising cost of living. Extra support has also been offered to first-time buyers.

Over the years, property has proven to be a stable sector. If times are tough for consumers and interest rates rise, then the rental market becomes more buoyant. People consider downsizing or simply move on for different reasons than in a quickly growing economy. Following the pandemic, we have seen people looking for homes with larger gardens and scope for home offices. Now we will likely see people looking for less expensive properties to reduce expenditure on their mortgage.

All the while, the rental market will continue to attract people moving on for different reasons. Perhaps they have sold their home and want to be in a better position to purchase as a cash buyer for example. We may see the return of accidental landlords. These people need to sell their homes but find this difficult because of adverse economic conditions, therefore, decide to rent out their property instead, giving enough time for the economy and house prices to recover.

From a business perspective, there has never been a better time to consider an estate agency franchise. In years gone by, the barrier to entry was high, requiring high street retail premises. The shift to home working which is now accepted as normal in most industries has also benefited estate agents looking to start out as it keeps start-up costs low.

For instance, at Propertynest, our agents all start out working from home. They can continue working remotely, indefinitely or if they choose to grow, take on staff and open an office.

By providing both a lettings and sales service means agents enjoy the perfect hedge: in times of economic growth, earning money from selling property becomes easier, and in times of economic contraction, the same applies to lettings. For agents looking to build a business and sell it, the commissions earned on a letting and management portfolio can attract anything up to 1.5 times its annual revenue.

Recent advances in software for the sector have also helped forward-thinking estate agents. While there are many “traditional agents” still using old-school methods, there is now a raft of new, innovative applications available from CRM and lead generation systems to data-driven content applications which track the market in real-time.

A property franchise opportunity can suit people from a variety of backgrounds. However, they will need the right skills, such as being able to demonstrate having worked in a target-driven environment with a focus on offering great customer service. They also need to be self-motivated with a strong work ethic.

Whatever the future holds, we know that the property market will always be there, and be prioritised by the government when support is required! People will always need to rent or buy and so there will always be a place for committed estate agents willing to offer a tailored personal service to help people move and work the extra mile for their clients.

Vincent Anthony is the founder and managing director of Propertynest.