Entrepreneurs Look to Full-Service Real Estate Franchises as Interest Rates Rise

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As rising interest rates cool down the hot real estate market, entrepreneurs are seeking real estate franchises that will weather rising rates and slowing sales. Discount real estate franchise systems entice customers with lower sales commissions for less service, and became popular during the years when interest rates were the lowest they had been since the mid 1950’s.

As rising interest rates cool down the hot real estate market, entrepreneurs are seeking real estate franchises that will weather rising rates and slowing sales. Discount real estate franchise systems entice customers with lower sales commissions for less service, and became popular during the years when interest rates were the lowest they had been since the mid 1950’s. However, they suffer when rising interest rates create a "buyer's market," and sales drop off. As a result, experts predict a shift in investor attention, away from "discount" real estate franchises, and toward a more stable business model that keeps real estate offices busy during downturns in sales.

Dan Gallien, founder of Rent 1 & Sale 1 Realty, says that the current real estate market correction is just getting underway is already proving this to be true. "Sellers are realizing the need to list their properties with a full service real estate office, to get maximum exposure and support to sell a property successfully and for top dollar." Rent 1 & Sale 1 Realty specializes in both residential rentals and sales, and is already seeing dramatically increased interest in full service real estate offices. "Developers of pre-construction properties and condominium conversions, as well as home owners, need to attract the interest of the most productive real estate associates and their buyers," says Gallien. "You can't attract those associates with discounted commissions and limited customer appeal."

Gallien points out that serving all aspects of residential real estate provides a built-in hedge against changing interest rates, an irresistible formula for success for enterprising investors. He is convinced that this is the reason for the flood of nationwide interest in Rent 1 & Sale 1 Real Estate Franchises. "We take advantage of the inverse correlation between rentals and sales. Rental activity increases as interest rates rise, and sales activity increases as interest rates fall. Being able to serve both markets is even more important now, with investors who intended to sell turning into landlords, to maximize their value when the market shifts from sales to rentals.”

Gallien believes that the discount approach, with its built-in reduced commissions, handicaps a franchisee's ability to succeed. "Quality associates are a real estate franchise's greatest asset. Limiting their ability to maximize their income won't attract them to your office. Rent 1 & Sale 1 Realty services all aspects of residential real estate, keeping customers coming in no matter what interest rates do."

The Rent 1 & Sale 1 Realty business model also helps the franchise establish itself faster in the community. Dan Gallien adds that "discount franchises offer a 'take-it-or-leave-it' menu of limited services. As interest rates rise, buyers, sellers, renters, and landlords look for a full-service approach that gives them access to all their options. The Rent 1 & Sale 1 Realty franchise system focuses on being prepared to serve all our customers, whatever their needs."

Gallien feels that the nationwide interest in Rent 1 & Sale 1 Realty's Franchise System is the result of a business model designed to succeed for decades to come. "It's clear right away to investors that our system is driven by our commitment to our franchisee's success. We've created a win-win opportunity, and the tremendous interest in our franchises is proving us right."

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Bill Teubner