Top Tips For Starting Your Own Real Estate Agency

O*NO, you are thinking of going out on your own but you’re not sure what you need to do to make sure you have a legally legit agency!

Whether you are sick of being told what to do, tired of making your boss rich or simply wanting to build an asset for your future, if you are thinking of starting up your own agency then you have come to the right place!

Here are our 5 hot tips to make sure you start off on the right foot:

1.  Brand Protection

You’ve dreamed up your new name and branding but are not sure how to protect it. First tip - do trade mark, business name and Google searches before you get your heart set on a name as you need to make sure you can register it. Don’t spend thousands on branding before you do this, or you may lose that money if your name is already taken!

Once you have landed on your new look, you need to protect it. In Australia, registering a business name is not proof of ownership. It is best to register a trade mark to give you the ultimate protection so that no one flogs your brand.

2. Corporate Structure

You would have heard of companies, trusts, partnership, joint ventures and other fancy pants structures. Which is right for you? Good question. It will depend on your objectives and whether you are primarily looking for asset protection or tax minimisation as your end goal.

Quite a few start-ups decide to start as a sole trader and then ‘think about’ structuring later. If you take this track I give you two cautions. One - As a sole trader you have a huge amount of liability. Only go down this track if you have no assets in your name. Two – if you have grown your agency, then when you transfer it to your new entity there could be significant capital gains tax to be paid, but seek advice from your accountant on that one.

3. Shareholders & Partners

Whether or not you should go it alone or bring on partners will be completely up to you. If you do bring in partners, make sure you nut out the partnership rules from the start. We all hope that we never need to pull the rules out, but you can bet if things turn south in the relationship, it’s easier to have the rules agreed from the beginning.

The rules should be in a shareholders agreement (or partnership agreement, depending on your structure) and cover things like who can make what decisions, what happens if someone wants to leave the business (or dies), how other business partners can be brought in, what happens if someone is not performing and how dividends/partnership profits are to be paid. There are many other items these agreements can cover, but this gives you an idea.

4. Contract Templates & Policy Documents

Get your legals sorted. You’ll need website terms of use, a privacy policy, collection notice, listing agreements, managing agency agreements, employment agreements, WHS policies and various other templates for use in your agency.

Think about these items in terms of your brand, not just as words on paper. Everything that you put out in the public domain, or get your clients to sign, is a reflection of your brand, so get this right and make it sound like you – that’s why a cut and paste job from someone else won’t cut it (copyright infringement aside).

5. Buying a Rent Roll vs Organic Growth

If you’re thinking about operating a property management business, have you thought about whether you will grow your rent roll organically, or should you buy a ready made rent roll? Both have their upside and successful agencies go for both. Start-up land can be hard and a ready made rent roll can ease the lumpy cash flow burden by providing a steady stream of income.

Key Takeaways

1.  Protect your brand and make sure you can use your chosen name

2. Get your structure set up right from the start

3. Document your relationship with your shareholders or partners

4. Sort your legal docs and templates and align them with your brand

5. Think about buying a rent roll so you have a steady stream of income

Our Real Estate Agency Start-Up Checklist will ensure you don’t miss any important steps and will assist you to shield your assets, future proof your relationships and expand faster. What are you waiting for, download our FREE checklist now.

Boring legal stuff: This article is general information only and cannot be regarded as legal, financial or accounting advice as it does not take into account your personal circumstances. For tailored advice, please contact us.