A question I’m getting a lot these days is “Should I grow my brokerage business in this hot market? I think we may have reached a peak?”
Well, the market is certainly on fire and increasing resources and reinvesting in your business is something we should all be doing. The challenge for many is that their scars from the last down cycle are still visible and I still meet many agents that are gun shy about reinvesting in their business even though their production has gone through the roof.
Some in the industry feel that we are peaking or have already peaked in this new cycle we are now operating in. I am speaking on a panel at a multifamily conference this Wednesday and in my pre-planning calling with the panelists, half of them believed we are peaking right now and a new bubble has formed.
So for those that are looking to double down but feel you are too late and are just hanging out waiting for the bubble to pop, I say, you are making a mistake. No one has a crystal ball and many think this market could well run out a several years longer. As long as you follow a few simple tips that I’ll share with you, even if the market does turn, you should be alright.
I’m taking my own advice and have been hiring extremely aggressively during the last three years and doubled our headcount in the region. In addition in the last thirty days I’ve signed 3 new leases to expand my three offices in White Plains, New Haven and Manhattan that I oversee to accommodate for more growth in our business to take advantage of this market cycle.
No matter what type of real estate business you are running, here are a few key attributes of your decisions that should allow you to make sure you are making the right investment moves:.
- Expenses should be able to be cut at a moment’s notice if the market turns, be nimble.
- Additional expenses should be done for activities that are consistent, not one hit wonders, i.e. don’t do one mailing, commit to a mailing campaign and space it out over a 6 month period.
- Measure your results. You can’t improve what you don’t measure. If it’s not work it, cut it.
- For every two dollars you are investing in your business, put one dollar into a rainy day fund so when the market turns, you can ride it through to the other side. I always look to have three years of expenses put aside so I can ride a down market and emerge in stronger position.
- Invest in resources that leverage you into more meetings and relationships.
- Make moves like you plan to be here in 20 years. Don’t think short term.