Challenges Facing Small Real Estate Firms

I asked 20+ operators about their biggest struggles in real estate. Here're 3 things almost everyone shared: 1. Payroll: Payroll is your biggest expense after debt. Should you hire another leasing agent/property manager? Can you afford to? I’ve seen operators spending $1,800 per unit annually in Georgia, bleeding cash. On the flip side, I’ve seen properties run lean at $500 per unit, only to crumble when turnover happens. 2. Vendors: Managing renovations takes time, energy, and patience. None of which operators have enough of. One vendor is late, and the entire project timeline collapses. The cost of inefficiency often outweighs the cost of renovation itself. 3. Forced vacancy: Renovating a property often means forcing tenants to move out. Tenants don’t want to leave, especially those who’ve lived in a unit for 10+ years. Sometimes you're left stuck waiting 2–3 years to achieve their value-add goals because tenants won’t move out. I keep meeting operators who face these time and again. But there’s no one-size-fits-all solution. And it highly comes down to execution. Operators: Feel free to share how you manage these issues in the comments so that others can have some takeaways👇. - If you're struggling with 2 and 3.. Feel free to drop me a text, might have some personalized ideas. Happy to help!

Times are tough for nearly every real estate business, but different parts of the country report unique challenges and approaches. Inman Intel’s monthly gauge of industry sentiment reveals interesting regional disparities. 1. Inventory Shortage: Agents in the Midwest and Northeast are facing tougher inventory shortages, with 33% and 44% respectively listing it as their top business concern. 2. Commission Splits: Ultra-high agent splits are less common in the Northeast. Only 4.5% of agents here have splits of 90/10 or above compared to 17.9% in the Midwest, 34.4% in the South, and 30.6% in the West. 3. Buyer’s Commission Queries: A significant share of clients in the West (35%) are questioning the necessity of covering the buyer’s commission, more than any other region. 4. Brokerage Switching Trends: The Northeast sees the highest percentage (12%) of agents nearly certain to switch brokerages within the next year, while the Midwest has the lowest (3%). Understanding these regional differences is crucial for strategizing in today’s challenging market. Dive deeper into the full regional breakdown and other key findings from the latest Inman Intel Index.