WARNING: You’re about to read a suggestion for your business that won’t be easy to undertake. But in doing so, you could tap into three very profitable revenue streams for your business. You’ll have to start a new, challenging venture to access these revenue streams. Are you up for it?
I coach agents from all over North America. Some operate in small cities. Small cities come with small populations, which limit your ability to build a large, thriving business. The main reason is because it’s hard to generate a significant number of leads. Leads drive sales.
One way to side-step this small-market challenge would to take your business to a national level. You could do this by marketing in national publications. For example, run your best lead-generation advertisement in USA Today, a national newspaper with a subscription base of more than 2 million . Think about the number of leads you would be able generate from just a single ad!
OK, this might not make a lot of sense to you right now because the majority of these readers aren’t looking to move to your area. However, if you shifted your marketing toward real estate investors, you might be surprised to find hundreds or thousands of people that might be willing to buy an attractive investment property in your area.
In order to capture sales to investors outside of your market, you’re going to have to offer property-management services to out-of-town property owners. This is why I issued the warning at the start of this article. Property management is not an easy venture to launch. There are obstacles to overcome and challenges to face.
However, property management services are what would allow you to sell homes to investors outside your area. The ability to take your business nationwide could be very profitable for you. Think about advertising in publications such as the Wall Street Journal or Investors Business Daily. What type of clients could you attract to your business?
Many agents who consider property management services only the monthly income received for the management of properties. This income is attractive, and it can be structured to cover all of your overhead associated with the service. If you have 50 homes under management and charge $100 a month per home, your business collects $5,000 a month without having to sell a home. You’d take it, right?
Another extremely profitable opportunity available to you through property management is the ability to sell the homes under management. An agent I coach adds a clause in his management agreements that gives him the ability to sell homes under management and earn full commissions on each sale. Obviously, the terms of the sale would have to be acceptable to the investor. If you had 50 homes under management with clauses that allowed you to sell them, you would have 50 pocket listings at your disposal. This would be a very attractive asset for your business.
But let me tell you, property management is a tough business. You should consider all the challenges before getting involved. Also consider the option of finding a great property management company and referring clients to that company. This could give you the ability to take your business nationwide but without having to provide property management yourself. Of course in this model, you would lose two of the profit opportunities available through property management: monthly income and the listing of homes under management. You’d still have the ability to generate leads in national publications.