Is a Property Franchise for Me? Questions You Need to Ask
If you have already worked hard to accrue a nest egg, you may be thinking about investments that have the potential for a healthy return. You may have already given property investment some consideration.
Buying a property investment franchise is an option that many entrepreneurs opt for when they are looking to get into the industry. So, before you jump straight in, give these questions some thought and discover if this is the route you should take.
What do you know about property development?
Property development is mainstream entertainment these days, with popular programmes like ‘Homes Under the Hammer’ and ‘Property Ladder’ showing how to ‘flip’ a property. Striking a deal might look easy on the television, but it’s often a case of ‘buyer beware’.
People can be easily tempted to invest in a property that looks like it’s a bargain. These types of properties come onto the market well under the market rate because they ‘need a bit of work’ or ‘require modernisation’. However, if you don’t know what you are doing, the reality can be a bit more costly.
Another way to get a return on a property investment is through the buy to let market. Again, the property might come onto the housing market at a competitive price with a few issues. An investor can take the property on, bring it up to scratch for a monthly rental income that generates a good return on the original investment.
Do you have the right skills?
Successful property developers have a range of skills. Communication and people management skills are key. Knowing current housing market conditions and being able to analyse risk is critical too.
If you make a poorly researched property purchase, you could find out you have a money pit on your hands. The excitement of property developing soon wears thin when a property you’ve done up won’t sell, or you can’t get tenants in at the optimum rental.
Should you consider hedging your bets?
Brexit has created a lot of uncertainty in UK markets too. Some areas have seen house prices fall or stagnate. This is where knowing your market conditions is critical. For new entrants to the property investment market, keeping on top of local and national trends can be a tough ask. So why not consider a property investment franchise?
This is a flexible investment model that offers the best of both worlds. Whilst any property investment comes with a certain level of risk, realising a healthy return on your property investment, as well as benefiting from the security of a network of support is achievable through the franchise model.
The benefits of property investment through a franchise are considerable. However, before you consider getting involved, run the figures to ensure you have access to sufficient capital to invest. It’s important to remember that every investment comes with risk attached, so also make certain that you have not over-committed yourself financially
In business, trust is key. As with any market, sometimes it isn’t what you know, but who you know. Buying into a property franchise allows a new entrant to the property investment market to enter an established network, enjoy instant brand recognition and to be able to generate solid business leads.
Without this kind of established back-up, rookie investors going it alone can make costly mistakes that are hard to come back from.
Taking out a franchise is a brilliant way to get to know the property investment business. Franchisees benefit from training and support from the franchisor’s head office.
Franchise opportunities provide a fantastic grounding for would-be entrepreneurs and build firm foundations for a successful career in property.
By Jo Thornley, Head of Brand and Partnerships at Dynamis. Joining in 2005 to co-ordinate PR and communications and produce editorial across all business brands. She earned her spurs managing the communications strategy and now creates and develops partnerships between BusinessesForSale.com, FranchiseSales.com and PropertySales.com and likeminded companies.