Here’s how much it costs to buy a business or real estate agency like Jawitz and Just Property
- Most of the reputable real estate agencies in South Africa sell some of their stores as franchises.
- They will sell you a franchise, train you and possibly your staff, and offer you ongoing support – for both upfront and ongoing costs.
- Competition between franchises and real estate brands is tight, and many do not publicly disclose their franchise fees.
- Some real estate franchises do not involve the sale of houses as such, but rather focus on peripheral activities.
- Some real estate agencies and real estate companies cost only Rand 50,000 upfront, but more established brands with physical stores cost much more.
- For more stories go to www.BusinessInsider.co.za.
The real estate agency market in South Africa is very competitive, with a handful of established brands dominating much of it.
Buying a franchise from an established brand can help you avoid many of the difficulties and pitfalls of starting a private agency. The franchisor will provide you with the tools to start your own business selling properties in a specific area. Some offer ongoing support and training to improve your chances of success – and their chances of earning larger monthly income through franchise fees.
Choosing a real estate franchise is not entirely straightforward, however. Many agencies target specific market sectors. While those who focus on the higher end of the market may earn you a higher commission, their turnover may be lower than those who sell cheaper properties.
Not all real estate franchises are created equal either. Some offer a full brick and mortar experience and will help generate leads for franchisees. Others offer a simple online presence and may expect you to do most of the lead generation and marketing.
The region in which a franchise allows you to operate is also critical to the success of your business. In many cases, a franchisee will only be allowed to sell in certain suburbs.
If you want to start a real estate or real estate business and prefer to buy into an established system, here is what you can expect to pay.
The Just Property Group has 95 branches spread across South Africa. The group offers both sale and rental, including a selection of vacation rentals. They are currently selling franchises all over South Africa and are looking for franchisees who are financially savvy, ethical and with business experience, among other skills. They offer a mentoring program through their head office to teach new franchisees how to run a real estate business.
The average cost of a new Just Property franchise is R500,000 to R 1 million, depending on the size and location of the store. Franchisees must also pay a monthly marketing and advertising fee of 4% and a management fee of 6%.
Jawitz Properties is a real estate brand established in South Africa – the company has 51 years of industry experience and claims to take a hands-on approach with franchisees. They seek to recruit new franchisees and offer a range of add-ons such as training, social media, business development assistance and an online referral system.
While having some passion or experience in the real estate market is beneficial, it is not a prerequisite for becoming a franchisee. They currently have franchise opportunities available in cities in South Africa and in Mozambique, Mauritius, Namibia and Botswana.
Jawitz Properties charges new franchisees an initial fee of between R30,000 and R200,000, depending on the size of the area. They recommend a working capital of 600,000 to 1 million rand, and they estimate the total investment to be around 1.2 million rand. Once established, they charge an 8% monthly fee, which goes towards advertising, marketing and management.
The guys from the property
Property Guys is a private real estate business that is not a typical real estate franchise. While they don’t sell homes, they do offer flat-rate marketing and advertising services to homeowners who want to sell privately. However, they claim to directly connect buyers and sellers.
The company is only two years old, but it is looking to grow its network by hiring new franchisees who are “strong, hard-working lead generators.”
A new Property Guys franchise costs up to R500,000 – split between start-up and upfront costs, and recommended working capital. They estimate the annual fee at R206,400 per year and charge 7% of the gross income royalties.
UNIQUECO real estate experts
UNIQUECO Property Valuers started in 2008 and provides professional property valuation services to the private, corporate and government sectors. They are looking for suitable partners to take a franchise share in the business. They provide new franchisees with basic training, business advice and marketing support, among other services.
The cost of the franchise is between 100,000 and 500,000 rand. The establishment cost is R50,000 and they recommend a working capital of R300,000. They also charge a monthly fee of 17%, split between advertising, marketing, and management.