{Updated December 2023}
“Buy land, they’re not making it anymore.” – Mark Twain
While those words were said over a hundred years ago, they ring true today. Real estate will always be a hot commodity, so there is never a bad time to get into the real estate business. Joining a real estate franchise is even better, as it offers aspiring entrepreneurs the opportunity to tap into an established brand, proven business model, and a network of support that can accelerate success in a competitive market.
A real estate franchise has the following advantages:
- Brand name backing
- A proven track record of success
- Instant brand name recognition
- Comprehensive training
- State-of-the-art technology
- Partnerships with leading vendors
- Operational support
- Marketing and advertising support
- Lead generation support
- Group purchasing power
What is the Scope of the Real Estate Industry?
The real estate franchise industry isn’t just brokerages. It includes various tertiary industries related to real estate, like property management firms, moving companies, storage facility providers, maintenance professionals, and renovation companies. Real estate is a broad industry when you consider all the companies that are touched by it.
The main segment of the real estate industry is obviously related to property and it consists of three fields: brokerages, leasing, and property management. Among brokers, there are residential and commercial brokerages, with a few that deal in both areas.
The industry is overseen by the Canadian Real Estate Association (CREA).
What are the Growth Trends in the Canadian Real Estate Industry?
Decline in Home Sales
Home sales have seen a downward trend according to CREA’s data. They published the following on November 15, 2023:
- National home sales fell 5.6% month-over-month in October.
- The number of newly listed properties declined 2.3% month-over-month.
- The MLS® Home Price Index (HPI) decreased by 0.8% month-over-month but was still up 1.1% year-over-year.
- The sizable decline was the result of fewer sales in most of Canada’s largest markets.
According to this data, there’s been an overall reduction in home sales across major Canadian markets.
Overall Industry Growth
Despite the recent decline in home sales, the real estate industry has grown, and increased growth is projected.
IBISWorld reports the following:
- The market size of the Real Estate Sales & Brokerage industry in Canada increased 0.5% in 2022.
- The market size of the Real Estate Sales & Brokerage industry in Canada has grown 7.3% per year on average between 2017 and 2022.
Statista expects the following for real estate in Canada:
- The value of Real Estate market is projected to reach US$7.82tn in 2023.
- Residential Real Estate dominates the market with a projected market volume of US$5.93tn in 2023.
- The value is expected to show an annual growth rate (CAGR 2023-2028) of 4.06%, resulting in a market volume of US$9.54tn by 2028.
Although home sales are down, the Canadian real estate industry has continued to grow.
3 Things to Consider When Buying a Real Estate Franchise
#1 – Selecting Area of Real Estate
You’ll need to decide which area of the real estate industry you want to enter, whether that’s buying and selling property, leasing property, managing property, or one of the many other related businesses. Factors that affect your decision include: your interests, expertise, and market demand.
#2 – Researching Your Local Market
You also need to know your local market. If your preferred franchise company is already represented in your area of choice, you will likely have to switch markets or look for a different franchise to join that is not yet in that market.
#3 – Evaluating Your Own Skill Set
As mentioned already, your individual abilities will factor into which franchise you choose. Here are a couple of examples:
Property management is much like other forms of management, where you’ll have to coordinate and oversee various activities while ensuring everything runs smoothly. If you’re adept at management in general, you may be a good fit for property management. It also doesn’t require any specialized knowledge to get started. A property management franchisor can provide the necessary training.
However, starting a brokerage is a bit more complicated. You’ll first need to become a licensed real estate broker. This includes studying the required course work and taking the licensing exam. Each province has its own specific requirements, so make sure you check with your province’s real estate commission.
Ready to Get Started?
No matter what area of real estate you want to enter, whether it’s a brokerage, property management, leasing, private sale franchising, or a side market like storage services, FranNet can help you find the perfect fit. Our expert franchise consultants will evaluate your individual goals and skills and match you with the right franchise opportunity. We will guide you through the process from start to finish at no cost to you. Schedule your free consultation today!