When it comes to starting a real estate franchise, there are a lot of choices to make. Which company should you choose? What territory should you go into? What kind of marketing should you do?
The 16 best real estate franchises on our list provide a range of opportunities for anyone looking to get into the industry. So take a look and see which one is the best fit for you.
What is a Real Estate Franchise?
A real estate franchise is a business that provides services related to the buying, selling, or renting of real estate. These businesses can be involved in a variety of activities, such as property management, home inspection, and mortgage financing.
- READ MORE: See our Franchise Guide
The Real Estate Market in 2022
The market is becoming more complex and competitive, with new players entering the market all the time. In order to be successful, it is essential to understand the various dynamics at play in the real estate industry and build a strong strategy accordingly. The market size will continue to grow, reaching an estimated $3.81 trillion by the end of the year.
- READ MORE: How Much Money do Real Estate Agents Make?
Why You Should Consider a Real Estate Franchise
When it comes to real estate, there are a lot of options. You can go the independent route when opening your own business, or you can choose from the many franchise opportunities available. Here are five reasons you should open a real estate franchise in 2022:
- Proven business model. When you open a franchise, you’re buying into a proven system that has been successful in this and other markets. This gives you a leg up on the competition and increases your chances of success.
- Greater name recognition. Franchises have a built-in customer base and greater name recognition than independent businesses. This can help you attract more customers and grow your business faster.
- Increased buying power. Franchises often have increased buying power, which allows them to get better prices on products and services. This can be a big advantage when you’re starting out and trying to keep costs low.
- Better training and support. Franchises offer comprehensive training and support, which can be invaluable when you’re starting a business. This can help you avoid common mistakes and get your business up and running quickly.
- Variety of opportunities. There are a variety of real estate franchises to choose from, so you can find one that best fits your goals and interests. You could get into property sales, rentals, management, or even start your own brokerage.
- READ MORE: 15 Real Estate Business Ideas
Selecting the Best Real Estate Franchises: Our Methodology
Real estate franchises offer promising opportunities for small business owners and entrepreneurs. To help you make an informed decision, we’ve outlined the criteria that any aspiring real estate franchise owner should consider. We’ll rate the importance of each criterion on a scale of 1 to 5, with 5 being the most crucial:
- Franchise Reputation (5/5): The reputation of the real estate franchise is paramount. Look for established brands with a strong track record of success in the industry.
- Initial Investment Costs (4/5): Assess the upfront costs, including franchise fees, training, and marketing expenses. Ensure they align with your budget and financial plan.
- Training and Support (5/5): Evaluate the training and support provided by the franchisor. Comprehensive training programs and ongoing assistance can be invaluable.
- Market Research (4/5): Conduct thorough market research to understand the local real estate market, competition, and demand for your services.
- Location (4/5): The location of your real estate franchise can significantly impact your success. Analyze market demographics and choose a prime location.
- Brand Recognition (5/5): A well-recognized brand can give you a competitive edge. Look for franchises with strong brand presence in your target market.
- Commission Structure (3/5): Examine the commission structure and fees associated with the franchise. Ensure they are competitive and offer potential for profitability.
- Technology and Tools (4/5): Modern real estate relies on technology. Investigate the technology and tools provided by the franchise to streamline your operations.
- Franchise Agreement Terms (3/5): Carefully review the terms and conditions of the franchise agreement, including renewal options and exit strategies.
- Growth Potential (4/5): Consider the franchise’s growth prospects and expansion plans. Does it align with your long-term business goals?
| Criteria | Description | Considerations | Importance (1-5) |
|---|---|---|---|
| Franchise Reputation | Evaluate the franchise's reputation and track record. Look for established brands with a strong presence in the real estate industry. | Research customer reviews and success stories. | 5 |
| Initial Investment Costs | Assess the upfront costs, including franchise fees, training, and marketing expenses. Ensure they align with your budget and financial plan. | Determine if the initial investment aligns with your budget and financing options. | 4 |
| Training and Support | Consider the level of training and support provided by the franchisor. Comprehensive training programs and ongoing assistance can be invaluable. | Inquire about the availability of training programs and the responsiveness of the support team. | 5 |
| Market Research | Conduct thorough market research to understand the local real estate market, competition, and demand for your services. | Analyze market trends, demographics, and local preferences. | 4 |
| Location | The location of your real estate franchise can significantly impact your success. Analyze market demographics and choose a prime location. | Identify prime locations with high foot traffic and accessibility. | 4 |
| Brand Recognition | A well-recognized brand can give you a competitive edge. Look for franchises with strong brand presence in your target market. | Assess the franchisor's brand reputation and market position. | 5 |
| Commission Structure | Examine the commission structure and fees associated with the franchise. Ensure they are competitive and offer potential for profitability. | Calculate how these costs impact your financial projections and profitability. | 3 |
| Technology and Tools | Modern real estate relies on technology. Investigate the technology and tools provided by the franchise to streamline your operations. | Evaluate the effectiveness of the technology stack and its suitability for your needs. | 4 |
| Franchise Agreement Terms | Carefully review the terms and conditions of the franchise agreement, including renewal options and exit strategies. | Seek legal counsel to ensure you fully understand and agree to the terms. | 3 |
| Growth Potential | Consider the franchise's growth prospects and expansion plans. Does it align with your long-term business goals? | Investigate whether the franchise has a strong presence and growth potential in your target region. | 4 |
Top Real Estate Franchises
Let’s dive into our list of some of the most successful franchises in real estate. You’re sure to find the best option for you among these top franchise opportunities:
1. Weichert Real Estate Affiliates
Weichert Real Estate Affiliates is a franchise that has a franchise fee of $25,000 and an investment range of $62,500 to $326,200. The royalty fee is 6% and the ad fee is 2%, making Weichert a great option for those looking for a solid return on investment.
2. Keller Williams
Keller Williams requires a $35,000 franchise fee and an investment of between $183,230 and $336,980. Keller Williams also charges a 6% royalty fee and a $1,000 marketing development fee each year. The company requires a minimum liquidity of $150,000.
3. Century 21
Century 21‘s franchise opportunity requires a minimum net worth of $100,000. The franchise fee is $25,000 and the total investment ranges from $24,700 to $459,250. The royalty fee is 6% of gross revenue and the BMF fee is .50% of gross revenue.
4. Coldwell Banker
Coldwell Banker is a well-known franchise that offers a wide range of services to clients. The franchise fee is $25,000 and the total investment ranges from $31,175 to $491,875. The minimum net worth required is $150,000 and the royalty fee is 5.5%. The ad fee is 3%. This is a well-established franchise with a lot to offer new business owners.
5. RE/MAX
RE/MAX is a great opportunity for anyone looking to get into real estate. The franchise fee ranges from $17,500 to $37,500, with a total investment of $43,000 to $286,500. You will need at least $35,000 in liquidity and pay a royalty fee of $125-$165 for each agent per month. There is also an ad fee of $95-$162 per month.
6. Sotheby’s International Realty
Sotheby’s International Realty is a real estate franchise opportunity that requires a $25,000 franchise fee and a total investment of between $40,650 and $315,500. In order to become a franchisee, you must have a net worth of at least $150,000 and liquidity of at least $51,500. The royalty fee is 6% and the ad fee is 2%.
7. HomeVestors
HomeVestors is a franchise opportunity that allows business owners to invest in a property-buying and flipping company. The investment range is anywhere from $80,000 to $456,250, and the minimum liquidity requirement is $80,000. The royalty fee varies.
8. HomeServices of America
HomeServices of America is a company owned by Berkshire Hathaway, which is run by Warren Buffett. They offer a franchise opportunity with a $25,000 franchise fee and a total investment ranging from $43,300 to $88,375.
The royalty fee is 6%. This is a great opportunity for those looking to invest in a business with low startup costs and a proven track record.
More of the Best Real Estate Franchises
Let’s take a look at more of the best real estate franchise opportunities. Many of these franchise opportunities have been successful in attracting and retaining successful agents.
9. Realty ONE Group
The Realty ONE Group is a top real estate franchisor with a franchise fee of $15,000 – $22,000 and a total investment of $44,250 – $224,500. The ad royalty fee is 2%, so you can be sure that your investment will go towards marketing and support initiatives.
10. EXIT Realty
EXIT Realty is a real estate franchise opportunity that has a franchise fee of $7,500 to $25,000 and a total investment of $62,800 to $212,000. They require minimum liquidity of $70,000 and they offer a discount for Military Veterans.
11. Better Homes and Gardens Real Estate
Better Homes and Gardens Real Estate has a franchise fee of $35,000 and a total investment of $32,420 – $455,000. With a minimum net worth of $250,000 and liquidity of $100,000 required, it’s open to those who are serious about business. The royalty and ad fees are 5% and 1% respectively.
12. NextHome
NextHome franchisees must pay a fee between $4,250 and $8,500, and are then responsible for total investments ranging from $15,250 to $214,095.
They also must pay a royalty fee that varies, as well as an advertising fee of $75 to $85 per transaction. This makes NextHome an affordable option for those looking to break into the real estate market.
13. Corcoran
The Corcoran franchise opportunity has a franchise fee of $35,000 with the total investment required ranging from $52,850 to $546,300.
The minimum net worth required for this opportunity is $150,000, and the minimum liquidity required is $75,000. The royalty fee for this opportunity ranges from 4% to 6%, and the ad fee ranges from 0.5% to 1%.
14. ERA
The ERA real estate opportunity has a franchise fee of just $25,000 and a total investment of $27,350 to $432,550. The minimum net worth requirement is $150,000 and minimum liquidity of $75,000 is required. The royalty fee is just 6%.
15. Flat Rate Realty
Flat Rate Realty is a franchise opportunity that offers a flat rate of only $570 per transaction. This franchise requires a total investment of between $42,500 and $125,000 with a franchise fee of only $10,000.
16. Epcon Communities
Epcon Communities offers a unique franchising opportunity for real estate investors. The franchise fee is $75,000, and the total investment ranges from $1,115,200 to $4,918,115.
Franchisees must have a net worth of at least $1.5 million and liquidity of at least $500,000. The royalty fee is only 2%. This opportunity provides access to a well-established brand with a successful track record.
How to Choose the Best Franchise for Real Estate Agents
Becoming a franchise owner is a big decision. It’s important to do your research to find the best fit for you and your business. Here are four things to consider when choosing a real estate franchise:
Support and Training
When you join a franchise, you’re joining a team of like-minded professionals who are committed to helping you succeed. Look for a franchise that offers comprehensive training and marketing support, including ongoing coaching and marketing assistance.
- READ MORE: How to Become a Realtor
Brand Recognition
In today’s competitive market, it’s important to align yourself with a brand that is well-known and respected. Look for a franchise that has a strong reputation in the industry and is known for providing quality service.
Business Model
Be sure to carefully review the business model of any franchise you’re considering. Make sure it is sound and that you understand all the fees involved. Also, be sure to ask about the franchisor’s success rate and the average length of ownership.
Investment
Of course, you’ll need to consider the financial investment required to join a franchise. Be sure to review the franchise disclosure document carefully to get a clear picture of the costs involved.
How Much Does It Cost to Open a Real Estate Franchise?
The cost of opening a real estate franchise varies depending on the franchisor and their initial franchise fee, renewal fees, etc. However, on average, you can expect to initially invest anywhere between just under $25,000 and almost $5 million for a franchise.
Be sure to carefully review the franchise disclosure document to get a clear picture of the costs involved.
Are Real Estate Companies Profitable?
Yes, real estate franchises and other real estate businesses can be profitable. However, it’s important to remember that the real estate industry is subject to market conditions and that no company is guaranteed to make more money from its investments.
It’s important to do your research and understand the risks involved before investing in a real estate company.
Image: Envato Elements
This article, "16 Real Estate Franchises to Start" was first published on Small Business Trends
via https://www.aiupnow.com
Kevin Ocasio, Khareem Sudlow
