The Pros and Cons of a Real Estate Office

Ryan Fitzgerald

Ryan Fitzgerald

By Ryan Fitzgerald

Last month, Lee Nelson wrote a great article for REALTOR® Magazine on how to build office culture in a virtual world, and it made me wonder…is a physical real estate office still necessary in 2017?

So, I decided to dive into the pros and cons of having a physical real estate office.

Let’s Start With The Pros:

A Place To Meet
Consumers like (and somewhat expect) to have a place to meet—and a brick and mortar office gives agents a professional office space to do just that. This means less time spent commuting since you’re likely already working from the office, and it’s a safe space where clients will come meet you for an initial consultation. The nice part about having clients come to you is that you can weed out the tire kickers who “just want to see a home” without sacrificing much time.

Company Culture
Having physical space helps provide a natural venue for building a company culture and positive atmosphere. Creating a contagious, hard-working environment can be one of the largest benefits of any brokerage, especially when that brokerage cares about providing their agents with tools to be successful. But there can be cons to this point, too. What can be an opportunity for a positive environment can turn into a negative environment if you aren’t paying attention. The warning signs will be there, so if you’re a designated broker, make sure you mind the type of company culture your office is producing.

Foot Traffic
Think about how many offices you travel by daily: Which ones stand out and why? It’s not always easy to measure what type of ROI foot traffic can offer a real estate firm by having an office in a great location. But having people drive or walk past your office offers your business a “branding play.” The more you can engage the people who are traveling by your office, the better that strategy will be. Free events to the public are a great way to gain attention and create a feeling of reciprocity. If you’re able to host outdoor barbecues or host community events during busy traffic hours, people won’t just drive or walk by, they’ll start paying attention.

Cons of a Physical Real Estate Office:

Let’s start with the absolute killer, the number one reason why someone would not have a real estate office: the expense.

The expense of operating a physical real estate office will immediately become the largest expense you have as a broker-owner. The number one reason businesses fail is the overhead. In addition to the lease, don’t forget about the furniture, phone system, internet, utilities, etc., because a physical office requires much more than just that monthly leasing fee. And, if you’re going to jump into a several-year-long lease for an office, it’s going to limit your ability to grow in other ways and could even cause the business to fail if not managed correctly. Calculate your annual earnings minus your expenses, the result is your profit. By adding a real estate office to your expenses, you’re cutting into your profits, as well as cutting into your time and efforts.

If you have a physical office you’re going to have maintenance issues that come with it as well. You have to spend fixing things that are broken. You have to make sure the sign out front and the windows are clean. The office needs to be cleaned as well, likely by a janitorial staff, which isn’t cheap. There are also staff and maintenance people needed to operate an office who will constantly be knocking on your door to help them put out fires when you’re trying to finish your own projects.

Sometimes you have to spend money to make money, but does having a physical real estate office really offer you the ROI that online marketing can? This is one is hard to measure—like a billboard or a sign on a bus—though, instinctively you should be able to tell. When you spend 20 to 30 percent of your profits on a real estate office, this prevents you from being able to spend money on other things, such as online marketing. For instance, we are opening a real estate company in Charlotte, N.C. in 2018 using only a website. Right now, we have a template set up to let people know we are coming, and in the next few weeks we will be live. If we had a physical office, we couldn’t spend money on things like this because our expenses wouldn’t allow for it.

For a few dollars a day, you can reach thousands of people on social media. You can take this a step further and reach only the people who are likely to buy by tailoring your online ads through retargeting pixels. We use retargeting to send a powerful message about what our clients are saying about their experience with Raleigh Realty by using this “natural” video below:

What do you think? Are there other pros and cons to a physical real estate office? Let us know in the comments section below.

Ryan Fitzgerald is the owner of Raleigh Realty in Raleigh, N.C. Connect with him on Facebook, Google +, LinkedIn, Twitter, or Pinterest.






  1. Always a give and take. Right?
    It comes down to what side one is on. The broker, or the agent. It’s about weighing expense to reward ratio. & technology use.
    A whole new world opens up.
    Would you rather pay your share of expenses?
    Or, earn your share of what would be the expenses?
    From the whole brokerage. Plus equity.
    Executive Suites like Regus work just fine.
    #NewBox #NewModel #CloudBased #eXpRealty

  2. Pablo

    I think if you straight up buy the physical place it is now an investment and not a liability or expense. You can always sell it if need be get money back maybe even a profit. Renting yes it’s an expense but today their is still majority of people that want to meet at an office not a public place and that’s due to a trust factor they want see and know you are a realtor and not scan artist. Anyone can make things look like a certain way online especially if that’s all you have is a virtual office. Many clients still want physical place would you hire a virtual doctor, or lawyer.

    Realtora are one profession that public trust the least in time hopefully it changes

  3. If you want your clients to see you as a professional – act like a professional – that includes having an office.

    It is the largest purchase that most people will ever make. They need to be confident in you and an office helps create that perception.

    Lastly what would you think if your physician or attorney worked from home?

    Cary Michael Cox

  4. Wow, this is some great commentary and feedback, keep it coming!

    Just like with physicians and attorneys I don’t believe there is a one size fits all. There are pros and cons to owning an office and certainly, if you have the capital to buy a real estate office and can find a way to finance it without incurring any monthly recurring debts, then it is a much safer play.

    It’s 2017 about to be 2018 and I have had maybe 5 clients ask me about meeting at my office…. most people just want to meet at the home they want to look at or the house they want to sell, and if that doesn’t work there’s always the local coffee shop!

    I’ve never lost a deal because I don’t have an office… I’ve never won a deal because I had an office either (in 2015 and 2016).

  5. As a female agent, having an office is an extra safety precaution. If you want to see a home or homes we can meet at the office where I will ask for your identification and get the search prepared.

  6. Bernard Hess

    I’ve been burned by a business (Not a real estate business) , that had only a P.O. Box as a reference to their business location. I only had to learn this lesson once to make me wary of any business that doesn’t list a physical address that is actually physically tied to their business, not just a
    Once I was rear ended by a guy in a van that owned a pool cleaning business, and even his Van was registered to the business and not to him, and the address for the business on the insurance card as proof of insurance was a P.O. box. As was the business on his Web site, a P.O. box again.
    Unfortunately this seems like something even big corporations do. There are some that make their contact information to be only a email for example, and you have to do some digging to find out where you can mail an actual snail mail letter that’s not a P.O. box.

  7. I’ve never lost a deal because I don’t have An office

  8. Brenda Logan

    I appreciate the information everybody is giving from their experience. I know everyone has different experiences and like someone said one size does not fit all. For a woman in business there is a safety factor that I never considered. That being said I still think you have to be very aware of the expenses of having a brick and mortal office outside of your home. For me it would really depend on how large the company was going to become.

  9. My thought on this outlined above by Cary. if you want to perceived as being a professional in your field and not a part-timer, I feel it’s critical to have some semblance of an office.
    Meeting at Starbucks isn’t going to cut with some buyers who are already nervous about purchasing a home.

  10. Client confidence and confidentiality with a physical office.
    Privacy of clients records is vital. Cloud based systems may not be secure enough.

    Local athourites and the State AG and RE commisson can find you if needed

    Plus having a physical office mean YOU believe in your community. After all we are selling physical houses to ppl for homes.