By Reyna Echenique
Special for El Inmobiliario
The professional practice of real estate brokerage requires a significant investment that often goes unnoticed by both clients and those considering entering the sector. This investment, far from being optional, represents the fundamental basis for a professional and successful service.
Initial investment
Entering the real estate sector demands a substantial investment before earning a single penny in commissions. Professional training and certifications, essential for those embarking on this business as a serious profession and operating professionally, represent only the beginning. A professional image, from appropriate attire to corporate materials and social media management, requires a significant investment. Technological equipment, including high-end mobile devices and computers, becomes indispensable in the digital age. Furthermore, reliable transportation, whether owned or rented, is a non-negotiable necessity.
Monthly operating costs
The monthly operations of a professional real estate agent involve significant recurring expenses. Advertising, both digital and traditional, requires constant investment to maintain visibility in a highly competitive market. Vehicle maintenance and fuel represent one of the most significant expenses, considering the numerous property visits. Constant connectivity through high-speed internet and telephone service, along with specialized software and digital tools such as a CRM, are unavoidable monthly investments. Memberships in professional associations, while an additional cost, are essential for networking and ongoing professional development.
Investment per client
Each potential client represents a specific investment that doesn't guarantee a return. The time spent on lead generation, including initial meetings and follow-up, has significant monetary value. The fuel consumed while showing multiple properties, sometimes for months, and the travel to destinations like Juan Dolio, Punta Cana, Bayahibe, La Romana, Samaná, Jarabacoa, or Santiago, represent a considerable expense. Promotional materials tailored to each property and professional photography are necessary investments for a competitive market presence.
The cost of non-productive time
Perhaps the most challenging aspect is the investment of time and resources in situations that don't generate income. Clients who ultimately don't qualify for financing, properties that fail to sell for various reasons, and deals that don't close after months of work represent significant costs that must be absorbed by the agent.
Investment in image and networking
In the real estate sector, the agent is their own brand and the primary property they promote. Attending industry events is not an optional expense but a strategic investment in professional development and generating opportunities. This entails a consistent investment in professional attire and grooming, considering that each event is a business opportunity. Tickets to industry events and cocktail parties, memberships to professional clubs and organizations, and participation in real estate fairs represent not only a significant monetary cost but also a substantial investment of time. Personal grooming for each event, including hair and makeup (for women) and overall personal style, is essential, as the projected image directly impacts the perception of professionalism and success. Additionally, promotional materials for networking and investment in continuing education and seminars are indispensable for remaining competitive.
Realistic perspective
Understanding these costs is crucial not only for those considering entering the sector, but also for clients and developers. Real estate commissions, viewed within the context of these investments, represent not only compensation for a successful sale, but also the recovery of multiple prior investments and the sustainability of a quality professional service. Adding to this is an additional challenge: some construction companies take months or even years to pay brokerage commissions, meaning the agent must have the financial capacity to sustain all these investments for extended periods without any guarantee of when they will recoup their investment. This reality makes the need for sound financial planning and significant working capital even more critical for remaining competitive in the sector.
This article is part of the series “ Hidden Challenges of the Real Estate Sector” .
The author is a lawyer, real estate entrepreneur, CEO of Echenique Group, Secretary of the board of directors of the AEI and a specialized advisor in the Dominican real estate sector.
