With telecommuting growing 115% since 2005, many Americans are spending at least half of their week working from home. But can a real estate agent have their own office? To help you decide if you’re in need of a real estate office or not, we are sharing the key factors to consider when deciding to rent an office. Let’s dive right in!
4 Factors Affecting Whether Real Estate Brokers Need an Office or Not
When first branching out on your own as an independent broker, one of the first questions you may ask yourself is if it is worth the time and money to establish a personal office. If you’re just beginning your real estate business, consider these four factors when debating a real estate broker office.
1. The Main Type of Clients You Work with
The first factor to consider as an independent real estate broker deciding on an office space is whether or not you’re working with buyers or sellers. Typically, when meeting with buyers, you will meet outside the office to show them homes. These interactions will most often happen at the properties, requiring less of a need for an office.
On the other hand, if you’re a seller agent, having an office can be beneficial. This will allow you to have longer conversations with clients in a professional space, helping them put more trust in your hands.
2. Access to Mobile Technologies
The next factor when asking “does a real estate broker need an office,” is whether or not you have access to mobile technologies.
As a broker, it’s important to have clear communication routes that are quick and convenient for clients to reach you. Closing deals properly without an office would require more mobile-friendly solutions, as having a laptop setup won’t work without a proper office. This means having a great wireless computer or phone, plus a portable printer and scanner. Sound like too much? Maybe an office is a better bet.
3. Place for Conferences and Meetings
In the case you want agents to hang their license with you, having a professional setting for them to meet clients will be important.
Typically, those who hang their license with a broker do so because they are looking for support and a business presence for clients and other prospects. So, at the very least, these partners will be looking for a rented conference room or co-working space to conduct business with you and clients, all with necessary WiFi and other amenities to fuel a successful meeting. If this won’t be a necessity for your business consistently, you can rent a conference room as needed.
4. Availability of Digital Signatures
Thankfully, with the latest technologies available, you can fill in the legal field on a computer or tablet and print them out for signatures, without a need for a full office space. Additionally, many documents used in real estate negotiations are legitimate with digital signatures, although not all are. This can make a world of difference when operating without an office, but be sure to check your local real estate laws first.
4 Things to Consider When Choosing Office Space for an Independent Real Estate Broker
When navigating the question of where real estate agents work and how to choose an office space in the case you opt for a more professional setting, finding the ideal space is essential to boosting your business.
In fact, the right office space can have a big impact on the success of your brokerage, giving off a professional feel and organized environment clients can trust. With the importance of this space, here are four elements to consider when choosing a real estate broker office.
1. Office Location
It’s all about location. While location doesn’t have to be a be-all-end-all, it is an important consideration when navigating your client list and providing a convenient space for them to meet.
Sure, there’s no such thing as the best location, but seeking one that matches the long-term vision for your brokerage will help boost your success in the long run. Whether the building you choose has wonderful local amenities or easy access, there are various location factors to consider in the process.
The top factors to consider in choosing an office location are:
- Easy access: Looking to attract busy agents? Consider first-floor locations with plenty of parking and convenience to highways. This way, agents can come and go quickly, while still coming to you with business.
- Local amenities: An office near convenience amenities will not only draw in agents but boost their willingness to work from your space. With the convenience of restaurants, coffee shops, gyms, or walking trails, coming to your office will be more of a benefit than a pain.
- Visibility & Signage: In order to attract walk-in customers, choosing a high-traffic location is a must. This way, you can promote your brand right from your windows with visible signage that draws people to your brokerage when they need it. This, again, is a wonderful reason to opt for a ground-floor office.
- Office Location within the building: If your brokerage is more focused on administrative services and doesn’t expect many agents to come into the office, you can safely opt for a more affordable location. The cost of an office will increase on higher floors in a building, allowing you to save some money in the case you’re not looking to garner foot traffic.
2. Office size
One of the biggest issues independent real estate broker agents run into is leasing a space that is too large for them, assuming they will grow into it, and instead spending far too much money on the space. Keep in mind, that your office will only be at truly full capacity during meetings, social events, or training events, and the rest of the time will be around 20% capacity, so do you need all that space?
To determine the size of your office, consider the number of agents you hope to support, as well as the type of services you provide and your budget. Typically, we recommend 30 sq feet per agent. However, this assumes that 80% of your agents will be mobile or working from home, so if this isn’t your policy, you likely will need more space.
3. Office Lease Terms
Another essential consideration is the terms of your lease. Many times, you will find the perfect office with terms that are not the right fit. So, before exploring a lease, be sure to consider what terms you are comfortable with, and what ones you absolutely cannot accept.
Some terms to keep in mind when exploring a lease are:
- Improvement Allowance: This is money that’s provided by the landlord that is applied to the tenant’s fixes to the office. This can include money for updating the space and is included in the lease rate and the term of the lease. However, some landlords will restrict what repairs are permitted.
- Lease Term: Always avoid lease terms that are longer than you plan to be on the property. If your brokerage is new, start with a term of fewer than two years. Once you’ve established a brokerage, you can sign a longer lease for a lower rate.
- Rent Increases: While some commercial leases offer a low rent for the first six months, later in the term you may see a major rate increase beyond your budget. This significant increase in rent can harm your profitability, so choose a more predictable lease rate to be safe.
- Personal Guarantee: This is a clause that says if you don’t have the ability to pay, the landlord will pursue a guarantor for the lost rent, as well as any added expenses. This is a lease term to avoid at all costs. Businesses fail for all sorts of reasons that may be beyond your control, and the last thing you need is a personal guarantee weighing on you.
- Flexibility: It’s best to look for terms that provide you with some flexibility. Real estate can fluctuate a lot, and so leases need a bit more flexibility in the case business is at a low point for a bit.
- Early Termination: In the case, your brokerage hits rough waters, you will want the option to cancel your lease so you can move out without fear of ongoing rental costs or lawsuits. This can be negotiated in the terms of your lease.
4. Budget Planned for Renting an Office
When it comes to budgeting for a real estate broker office, it’s best to spend no more than 30% of your expense budget. The total lease cost should consider any and all additional fees that may be charged by your landlord so you can accurately budget for the space.
The reason we recommend remaining below 30% is to ensure you have enough money for day-to-day operations, future opportunities, and any potential innovations. This way, you don’t spend all your money on rent and have more money for the future.
3 Reasons for an Independent Real Estate Broker to Rent an Office
While you may still be debating “can real estate agents work from home”, there are a few reasons it’s beneficial to rent an office as an independent real estate broker. Let’s break it down.
1. Most Real Estate Broker’s Work Happens Away from the Office
Real estate workers are not tied to an office in the classic sense. In fact, much of their work happens at a seller’s property, or on other various properties they are exploring. So why spend money on an office?
While lots of time will be spent with clients in their prospective spaces, having a professional space to lockdown and sign those final documents to close a deal can make a big difference, especially when your office is in a popular, convenient location. This way, you can conduct business in a professional manner.
2. Real Estate Brokers Need to Be Accessible
One reason many real estate brokers utilize offices is to work closely with others as a team. This allows for more collaboration, and less solo work, creating more of a team environment that thrives off of each other's successful energy.
While it's essential that agents are accessible, having an office space only boosts that. This allows them to have a setup to answer any questions and emails when they aren’t out and about, while simultaneously being available on their mobile devices while touring properties. Plus, an office space offers reliable internet access, so there’s no issue with connectivity.
3. Home Offices Mean Less Privacy
Can you be a real estate agent from home? Sure, but do you want to?
Working from home instantly morphs the two spaces, no longer making your home a private, relaxing space, but instead bringing the stresses of the work right to your front door. Think about it — do you want to have clients or agents at your home? Do you want all the work mail going to your front door? This separation may not seem essential, but it can help you feel more productive by getting you up and out of the house and to your professional office, even if you just want to rent an office for a day.
So, can a real estate agent have their own office? Absolutely.
When it comes to cultivating a professional, productive workspace when beginning as an independent real estate broker, acquiring an office space can help you get one step closer to the success you’ve dreamed of. While it certainly isn’t a necessity, it’s a significant building block for your business’s success, and something worth exploring.
To check out the various different renting options for real estate broker office spaces, contact us today.
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