For real estate businesses, diversifying revenue streams is important.
Buying, selling, leasing and managing property is stressful, so being able to help customers with the entire transaction saves them time, creates peace of mind and ensures your customers are getting a quality service from professionals you know will do a good job.
A range of opportunities
So what are the opportunities? The potential list is long.
From mortgage broking and finance services to provision of utility and services connections, architects, interior designers, stylists, landscapers, marketing and more, there are plenty of possibilities.
Compliance is an opportunity, where agencies help customers when it comes to smoke alarms, swimming pools and other requirements they may be unfamiliar with.
Conveyancing is another potentially stressful area in which customers can typically need help.
Providing conveyancing services online makes it easy for customers.
Navigating legalities and revenue models
Many real estate businesses now manage renovations for their customers.
Some do it for free, others charge a project fee, some engage tradespeople directly. Integration with services like Realty Assist can help landlords fund their renovations.
Obviously, there are legal agreements that need to be in place to ensure transparency in these arrangements, but it’s another potential headache businesses can solve for their customers.
The tech and team balance
While new revenue streams can deliver bottom line benefits, the real win is the increased level of service for customers, which should in turn lead to positive feedback and increased referrals.
But alternate services can be a distraction from the core business and the fact is, they are rarely integrated well.
It has to be seamless and the right tech is the key to making it work.
Time is of the essence and businesses can’t afford to put more responsibilities on the plates of their people.
Whether it stacks up financially is another question.
For this reason, the development of alternate revenue streams often makes more sense for larger offices or franchisors.
A shared services model might help.
Multiple offices within a network jointly employing experts so customers across a larger patch can be offered additional services.
Serving the local community
In weighing up new revenue streams, it’s important for principals not to lose sight of their purpose: serving the local community.
Opportunities need to be grounded in local needs. And every local market is different.
At Laing+Simmons, our Avalon-based office is located at Careel Bay Marina.
Many of the real estate customers they service are boat owners or sailing enthusiasts.
Recognising the overlap, the principals decided to integrate a boat brokerage into their service offering, under the Laing+Simmons Young Marine brand.
The same team, operating from the same premises, keeping additional overheads low while tapping an entirely new revenue stream.
However, these hybrid models and non-traditional revenue streams may not be a neat fit with some traditionally rigid franchisor structures.
The importance of flexibility
Flexibility will be required from both ends – franchisor and franchisee.
More than just a hierarchical consideration, empowering businesses to experiment with add-on services comes down to a question of organisational culture.
Will we allow this type of experimentation, even encourage it, or must our network toe the line?
Sometimes, an investment by a franchisor for its own network can have broader industry appeal.
Training programs, for instance, which are proven to work in one network may be able to be customised to facilitate the specific training needs of another.
At the corporate level, Laing+Simmons offers a dedicated recruitment service to attract, train and place talented people to fill specific roles throughout the network.
It’s an add-on service provided by head office to the network, which saves offices time and energy, both of which can be redirected into more dollar-productive tasks.
We view training as a multi-layered revenue stream value-add.
One example is the way we train our property managers to become investment portfolio managers.
It’s a stand-alone qualification which re-trains and up-skills property managers with important knowledge on positive and negative gearing, depreciation schedules and other complex information, so they gain a more rounded understanding of investment.
With this expertise, our people can add further value to customers and drive additional income for offices, with the complimentary benefit of creating more opportunities and additional career pathways for existing property managers.
Elsewhere, our centralised agent support service takes care of trust accounting, provides ad copy and fulfils other the many other administration services our offices – and their customers – need.
By building this infrastructure, our businesses can focus on employing dollar-productive people who can focus their efforts where there’s more bang for buck.
There are plenty of interesting examples across other networks too.
Enabled by better tech, and motivated by the desire to provide customers a better, more holistic service, real estate agencies are among the most progressive businesses in the country.
As an industry, we know sitting still means losing ground.