This guide outlines how to fortify your property business during a market shift that could see a real estate recession.
If you’re a real estate agent, you’ll be acutely aware of the fact that the market conditions have cooled down over the last few months, and people are fearing a real estate recession. Now that things have softened, there are a lot of agents worried about whether or not they’ll be able to stay afloat if the number of deals they are doing decreases. There’s always a lot of talk of business getting so tough that many people are going to leave the industry entirely, but that’s not a foregone conclusion.
How to survive a real estate recession
There are things you can do to not just stay in real estate but to actually thrive and succeed when a lot of people see their businesses contract. From trimming the financial fat to focusing on the most cost-effective lead sources, here’s how to keep your business going in a market downturn or real estate recession.
Before we dive in, it’s important to note that the market hasn’t fully shifted yet, so you have the chance to get ahead of a slowdown and take proactive measures to fortify your business. Even if conditions don’t worsen, you’re going to be further ahead of everyone else, and it will help you take more market share.
Take Stock
One of the best ways to make sure your business stays afloat in a real estate recession is to take an honest look at where and how you’re spending your money. Oftentimes, we are spending on things that aren’t necessarily giving us any return, and we’re just too busy to sit down and really evaluate. Those costs can really add up and eat into your revenue.
You might have signed up for a platform that promised to bring in leads but didn’t, or you’re paying for things you actually aren’t using. Take the step of sitting down with your bank statements and identifying those unnecessary costs. There’s nothing better than seeing it in black and white, and now that you have this information, you can start to trim the fat.
Cut Back on Expenses
Now that you know where you might be overspending, it’s time to streamline expenses and make your operation leaner to bolster against a real estate recession. If a service or product isn’t actually moving the business forward, let it go. One area you can make a huge change is with your office space. Instead of paying an arm and a leg for a long-term lease on a massive office building, consider something more flexible with a month-to-month contract.
Locations like Plaza Executive Suites offer affordable workspaces for a lean operation while still giving you access to meeting rooms, receptionists, and other features that will keep you looking professional to your clients and allow you to make a good first impression. If your expenses are too high, reducing them will immediately give your business a boost, and that will help you through a slow season.
Reduce Expensive Lead Generation Strategies
Generating leads is something we have to do consistently, but some sources of leads aren’t the best thing to be paying for when the market softens or nears a real estate recession. If you’re paying for things like radio ads and billboards, your finances are going to be drained a lot faster than someone doing something on a smaller scale.
You can always amp up on these lead generation strategies when business picks back up, but for now, consider ways to keep your lead generation as lean as possible.
Double Down On Database
One of the biggest mistakes real estate agents make is ignoring the most fruitful and affordable source of leads – your sphere of influence and the people who have already worked with you. No one is more likely to get us new business and referrals than the relationships we’ve already built, but so many agents rush for the new, shinier lead sources, and that costs them a lot of money.
This is the time to double down on your database efforts and really position yourself as a valuable resource to people. Make sure you’re active on social media, sending them direct mail, doing client appreciation events, and sending gifts a few times a year. If you’re top of mind with the people who already love working with you, you’ll be mentioned at work and at social gatherings, so if someone in their life is looking for an agent, you’re the most likely to get that call.
Some agents’ business is sustained entirely by their database, and that’s how they are able to stay in business and even grow when other agents are struggling to get by in a real estate recession. You’ve already done the work of creating great relationships, so why not take advantage of that?
Conclusion
The real estate market slowing down doesn’t have to mean the end of your business. If you’re smart, proactive and prudent, you can survive the market shift and even thrive and take your business to the next level. It comes down to controlling costs and investing in areas that have guaranteed ROI. Do that, and you have nothing to worry about.
Photo by Burak The Weekender
