Bill Rawson on how to make money as an estate agent
Bill Rawson, chairman of Rawson Property Group and property investor in his own right, on how to really make money as an estate agent
When Bill Rawson “went into property” in 1972, his motivation was blatant: to make money. He came from a poor background and had trained as an accountant but soon realised that in a career like that he would only get paid by the hour. “In property sales, you earn according to how successful you are, not by your time. I needed to make money and I figured out that I needed to get into something where I could determine my own income. Being an estate agent allows that, provided you’re prepared to put in the hours and the work,” he says. Rawson went to work for Cape Town agency Plotland, now closed. “There was no training in those days – most operated like cowboys, and they were doing a disservice to the industry. I vowed that if I ever had my own business one day, I would have the best agent training set up – it’s vital for success.”
UPSKILLING AND EXPANSION
He persevered without formal training by observing others and noting how they did business. He also noted how not to do business. Says Rawson: “I gave clients a better service than those around me, and I was able to advise them on how to grow their wealth by investing in property. And from that, I made money.” For a while Rawson sold plot-and-plan housing, where he even learnt how to build a house. He believes this adds to his property-selling skills set. “Any salesman should know all the ins and outs of the product they’re selling. For estate agents, that’s a house; bricks and mortar.” Rawson Property Group started in 1978. But it was in 1982 when Rawson launched Bill Rawson Estates from a 40m2 office in Claremont and employed 25 estate agents that “we cooked”. He adds: “We did the training and we sold about 30-40 properties a month from that little office.”
DIFFERENTIATION BY DEVELOPMENT
Between 1982 and 1998, Rawson’s offices expanded to 15 branches in the vicinity of Cape Town. Then he franchised the business to increase his development exposure. “Development is a high-risk business – 95% of developers go bankrupt,” he says. That Rawson Property Group has a development business unit – Rawson Developers – makes them stand out in the traditional estate agency world in South Africa. It came about because Rawson started investing in vacant land, which he then subdivided and sold off as plots. He tried to keep two plots for himself each time. “I would sell five plots to pay for the two. On my two I would build houses and sell them for more, which then became part of my property portfolio.”
Building a commodity that people want is creative and exciting, says Rawson. But most people don’t have the capital to do that and it’s a challenge to secure finance to build – Rawson Developers offer investors a piece of that property development pie. It is currently building and developing 810 residential apartments/houses on seven sites to the value of R2.2bn. “People who buy from us off -plan always make money. In the time it takes for us to build it – about 18-24 months – that property has appreciated. That it’s a new, modern home makes it highly desirable. Many of our investors follow us from development to development because they’re making money. And each development we build gets better and better.”.
ADVICE TO AGENTS
As an agent, you can make handsome commissions if you give excellent service, and work at it, says Rawson. “Many agents don’t realise they are in a fantastic business. We don’t carry the risk of holding any stock. All we need is a car and a cell-phone, and we can go out there and trade.” When Rawson started his career he focused on the idea that he was helping people buy homes for their families; that he could offer them a safe and secure place to live. “I set myself weekly targets and monthly targets. If you’re running a business, you have to do that, and keep a diary.” And you must be an expert in your field. “When you join Rawson Property Group, you have to complete the two-week training programme. And by rights you should have basic plumbing knowledge, know about architecture and quantity surveying, stay up to date with zoning laws…
Know your business, and you’ll do well.” But don’t spend all your commission if you really want to make money. Rawson’s mantra is: live on half; invest half. Be a good estate agent and be a good property investor – long-term, and also short-term as a speculator. In that way you can earn a passive income and grow your wealth. “I bought as much property as I could. As agents in the property business we see market trends, we come across opportunities. Take advantage! You’re in the industry but you don’t invest in the industry. Why not? By the time I was 32, I owned 12 income-producing properties.”
“Set yourself a target: your money and property should work for you and not the other way around”
Bill Rawson on real estate marketing
In marketing today, you have to use a spray-gun approach. Consumers are in so many spaces including digital and social media. I regard word of mouth as the most important.
Our car branding has been one of our most successful strategies. Our fleet of 358 branded cars cover thousands of kilometres every month.
I still love the show house as a marketing instrument. As well as the simple ‘For Sale’ sign outside a property.
Print advertising is still a force to be reckoned with. But it’s important that our ads are seen in the right editorial context.
Agents need to participate in promoting themselves individually as a brand. Even within their agency brand. I’m a great fan of YouTube – agents should include video in their marketing toolbox.
Bill Rawson’s tips for new agents
1. Set yourself annual goals. And write them down – every day, every week, every month. Understand the activity it will take to achieve that goal.
2. Keep a written diary. Electronic or paper – although I haven’t met anyone who has kept an electronic diary successfully. It’s important to review what you have done.
3. Buy a property every one to two years. Set yourself a target: your money and property should work for you and not the other way around.
4. Read. Books, newspapers, online stories. Research and analyse the property market and eventually, with experience, you can predict trends.
5. Don’t get left behind. Keep up with digital developments and embrace them. Join an agency that invests in technology.
6. Join industry associations. We need each other and should help each other. Organisations offer good knowledge-sharing opportunities.
7. Attend the National Association of Realtors conference. I recommend that every agent should go at least once to see the property industry in the States. You will notice that the South African industry is over-regulated compared to the rest of the world.