If you’re starting a real estate business, you know it’s important that your new business makes money. After all, you have to have enough cash in the bank to stay alive as a business, you don’t have to forget that the sole aim of every business is to make profit which will change your life for good.
The question is, what are the most effective means to go about making that money?
Below you will find a list of six strategies and tactics real estate agents use to bring in additional revenue, or to maximize their current revenue. From becoming a broker to flipping houses, we’re sure there’s at least one you’ll find useful
Renovate and change the appearance
you might not want to purchase a house that needs this much fixing…
If you’ve considered buying a house, fixing it up, and then selling it, you’ve considered “flipping.” Many real estate agents turn to house flipping, or to helping clients flip houses, in order to generate an additional income stream.
It is possible to earn $100,000 on a flip, you know is not common to make that much. Remind you that the real money is not hitting it big on one flip, but in flipping multiple properties that make a quiet high profit from each
There is also a lot of risk involved in renovating houses. In order for this strategy to work, you need to buy a house below market value and you need to be able to accurately estimate the cost of repairs
Before you buy a property, make sure you know what it will cost to flip, You will probably need to enlist the help of a real estate agent to figure this out, but you can get a preliminary idea by looking at the recent sales value of houses in that same neighborhood.
Of course, you don’t have to repair the house. You could also buy at wholesale price, and then sell as quickly as possible. “You can make an average of $5,000 to $10,000 per deal, with very little effort and work.”
Before you jump into flipping houses, we recommend you read step two (below).
2. Find hidden, off-market properties
If you can’t find deals before anyone else, you’re going to have a hard time making money. Many properties that are going to make you money are the ones you won’t find on the usual sites They’re the ones the owner needs to sale of quickly, and they’re not necessarily the foreclosures.
An off-market property (sometimes referred to as a “pocket listing”) might be one owned by a couple going through a divorce, or a property an owner no longer wants, perhaps because they’re leaving the country or going through financial hardship. They’re the houses that the owners can’t usually sell through traditional channels as they need to move fast. They’re the houses you might drive by with a sign out front that reads FSBO, or “For Sale by Owner.” These are your gems.
Finding someone who needs immediate cash means you’re much more likely to acquire a property at below market value. It’s these properties that are going to give you the biggest return on your investment.
A good way to find off market properties is to keep an ear to the ground. After all, you never know when someone from your network of friends, acquaintances, or relatives will approach you for help, either for themselves or on behalf of someone they know. Get your name out there. Join different organization This way, when someone from your network is in a jam, they’ll think of you first!
Beyond networking as usual, try to network and build connections with estate attorneys. They often have creditors who need access to money fast. Because of this, they’ll be much more likely to sell at a discount. Networking with wholesalers is a good idea too, as they often buy low-price properties that need fixing, almost as they become available, and make a quick profit by selling them just days after purchasing them. They’re in it for the short game, so if you’re a long game player, this could be a good strategy for you.
If you’re comfortable purchasing a property at auction, check out Auction.com. You can use this site to search for both residential and commercial real estate. Many properties are priced low and are listed on the site because they’ve gone into foreclosure or they’re owned by the bank.
3. Target the vacation rental market
Let’s talk about how you can make money, or how you can help your clients make money: vacation rentals.
In peak tourist season, owning a property you can rent to tourists may seem like a no-brainier—you build equity in a great location and have an opportunity to capitalize on that demand. But what happens when the tourist season ends?
If you’ve priced your rental too high, you’re probably going to have a barren off-season or at least an unpredictable period. All those vacancies are going to add up, especially if you’ve hired a property manager to take care of things. According to Mark Ferguson of Invest Four More, the real cost of a vacation rental is the cost to manage and maintain them.
The key to a successful vacation rental is to price the property low enough that it stays rented year round. If that’s not possible, ensuring you can make enough in the good season is essential.
4. Stage the property you’re selling
For many people viewing a property is an emotional experience. They have to imagine what their life might look like were they living there. If you’re marketing an empty house, you may find it hard to sell.
For most clients, judgment is passed from the moment they first view a property. If the property you’re selling only has photographs of empty rooms, you might not be making that killer first impression, which is key to moving things along.
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5. Take the broker’s examination
When it comes to becoming a qualified real estate agent, you simply have to take the tests required by your state. This doesn’t usually take more than a couple of months, and it qualifies you to sell property as an independent real estate agent, or in service to a larger company—though most states require new agents to work under a broker for a couple of years first.
What you cannot do with this license is open up your own practice and hire other real estate agents. To do that, you have to become a broker.
By taking and passing the broker’s exam, you will then be free to start your own real estate agency and collect commissions from the real estate agents who work for you.
Because most brokers take between 20 and 50 percent of an agent’s commission, it pays to become a broker yourself—and not just because you could make an extra buck, but because you won’t be losing out on the money you make.