How to start an estate agency?
If you want to know what it takes to set up an estate agency, you’re not alone. More people are starting an estate agency than ever before, with unprecedented increases in the number of UK property agents in recent years.
Part of this rise is down to a generation of entrepreneurial property professionals who are starting their own estate agency. The strength of the self-employment model and the emergence of remote working have helped to remove the barrier of property costs.
Of course, there’s a long list of considerations to make before starting an estate agency. Here we assess some of the most important things you need to know – and how Alto’s cloud based software can help.
1. Legal requirements when starting an estate agency
Whilst there is no legal requirement to be licenced or regulated, estate agents must abide by the Estate Agents Act 1979 and the Consumer Protection from Unfair Trading Regulations 2008. All UK residential property estate agents must also belong to a government-approved redress scheme under the Consumers, Estate Agents and Redress Act 2007.
There are also a number of compliance obligations to meet, such as the Anti-Money Laundering (AML) Regulations, which require estate agents and letting agents that meet the rent threshold of 10,000 euros or more for at least one month, to register with HMRC.
Alto software includes integration with SmartSearch for quicker, easier and more reliable AML checks without leaving the platform and in half the usual steps.
2. Costs when setting up an estate agency
How much does it cost to start an estate agency? Of course, the answer to this depends on many moving parts – are you setting up online or opening a bricks and mortar office? Will be purchasing a franchise? Are you operating sales, lettings or both?
Most people going it alone will have experience of managing a branch, so it’s likely they will have a good idea of the operating costs required to run the business month-to-month. Speak to your professional advisors, do your research and set yourself an estimate for the setup costs and initial 12 months of business. This should help you to plan budgets and allocate costs.
3. Marketing your estate agency
One of the most important things to do when setting up an estate agency is to market yourself well, particularly if you’re going up against established local competitors.
This starts with strong branding and a good website, which is increasingly important in a sector where flexible communication is key – giving customers the opportunity to get in touch via the website whenever it suits them most.
Helen Worrall and Tania Dutnell founded Tanlen Estate Limited (trading as Cardigan Bay Properties) in February 2021 and immediately turned to Alto partly due to the PropertyFile integration, which offers complete transparency and enhanced communication throughout the customer journey.
Helen said: “We both used Alto in our last job so as far as getting set up, it made sense to use Alto again and we are very glad we made that decision.
“The support we got during set up (and still now) is fantastic and they offered great advice and ideas during set up, which we took on board.
“PropertyFile is brilliant too. It helps to streamline our workload and has integrated into our website to give buyers and sellers better access to us. A good website is vitally important and PropertyFile is a key part of this, giving customers the opportunity to communicate with us.”
4. Property management CRMs
Property management software is an essential part of any estate agency business. CRM software will help you to market properties, manage sales progressions, communicate with customers, coordinate diaries, prioritise tasks and much more – all with greater speed, efficiency and accuracy than any paper-based or Excel solution can ever do. It’s a given that you will invest in software but with so much choice on the market where do you start?
Speak to our team to see what makes Alto stand out.
Better still, read Alto case studies and see what our customers have to say. As part of our “11 questions we ask every estate agent” series, we inquire about advice for agents seeking to change software. It provides some valuable advice for anyone starting their property CRM journey.
5. Residential vs. Commercial route
Are you going to focus on residential property or have you considered the commercial route too? This will inevitably depend on your own skills and experience, but it’s another decision to think about before you start your business.
Commercial property can bring greater revenues, but you have to know your stuff. Remember, commercial property agents will need specialist knowledge to navigate the more complex lettings process.
You’ll need to understand planning law, plus the intricacies of commercial landlord and tenant law. There are likely to be more questions around matters like fixtures and fittings, maintenance and utilities. It’s common for commercial tenancy agreements to be under greater scrutiny and subject to more negotiation too, especially for lease renewals.
6. Alto’s tips for setting up a successful estate agency
To kick-start your estate agency, we have compiled some valuable tips that will come in handy.
- Research your target market, current trends, competition – like any business, don’t go into it blind. It’s important to know what you’re up against, who your ideal customers are likely to be and how you will stand out in competitive markets.
- Create a business plan – this is your opportunity to set everything out in one place. Make a detailed plan of how you will approach the business, set realistic budgets and achievable targets. This could be vital if you are hoping to secure funding.
- Create strong branding – it’s important to have a point of difference and strong branding will make people notice your new estate agency. Be consistent with your branding across all your materials – with Alto, you can personalise your customer portal and add your logo to letters/emails before they’re sent via the system.
- Create an effective and attractive website – make sure you invest in a website that looks good and performs well. Online activity is so important to modern estate agents, even those with brick-and-mortar stores.
Thinking about starting your own estate agency? Book a free, no obligation virtual demo and see how Alto can support your business.