The vast majority of realtors who have newly entered the business are doing so because they see it as a means to generate a higher level of income for themselves to give them and their family a better quality of life. Along with that is a realization that the ongoing demand for housing in North America makes it a fairly reliable source of self-employment, but with that of course comes the need to understand that this business is among the most competitive of all of them.
It’s also true that the majority of people choosing to become realtors are going to be both ambitious and motivated to get off to the best start possible with their new profession. To that end, our online real estate lead generation service here at Real Estate Leads is an excellent way to gain a real advantage and be put in touch with people who are genuinely considering either buying or selling a home.
Now of course all this does is provide you with the opportunity – what you make of it will depend on the way your present yourself as someone who can help those folks be in the best home for them. Don’t take away from any measure of the focus on becoming a true knowledgeable professional.
With that said, there’s a lot going for taking the approach that anything that gives you a leg up on your competitors is a good thing. If you’re real estate business is growing, then that’s the best reflection of the fact you’ve made the right choices and are building in the best manner possible.
So the question becomes what are the most effective strategies to go about getting more clients, and making more money from real estate?
Here are 5 strategies and tactics real estate agents use to bring in additional revenue or maximize current revenue.
- Fix It and Flip It
Buying a house, fixing it up, and then selling it is referred to as ‘flipping’. Many real estate agents have repeat clients who engage in house flipping as a means of creating an additional income stream. And of course, having even one such client can be a big benefit to you.
However, there is a lot of risk involved in flipping houses. In order for this strategy to work, a purchaser needs to buy a house below market value and then be able to accurately estimate the cost of repairs. Understanding how to do this best comes only with actual experience.
Advise your clients to be able to calculate approximated After Repair Value (ARV). They will expect their real estate agent (you) to be able to help them figure this out. You can get a preliminary idea by looking at the recent sales value of houses in that same neighborhood.
Another option is buying at a wholesale price, and then selling as quickly as possible.
2. Dig Up Hidden or Off-Market Properties
Many properties that are going to make your clients (and you) money are the ones you won’t find on the usual online locations or the MLS. Often they’re ones owners needs to get rid of quickly, and not necessarily the foreclosures.
An off-market property is sometimes called a ‘pocket listing’ and might be one owned by a couple going through a divorce, or a property an owner no longer wants for any number of reasons – including unexpected financial hardship. They’re the houses that the owners can’t usually sell through traditional channels as they need to move fast. These can be gems for investor clients of yours.
Quite often they’ll be able to acquire these properties at below market value.
3. Target Vacation Rental Markets
Vacation rental properties can also be a good choice for clients of yours who are looking for different profitable ways to invest in real estate. However, you should always advise clients that the real cost of a vacation rental is in managing and maintaining 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, your client needs to calculate whether they can make enough during the ‘good’ season.
HomeAway, a vacation rental site, states that that the average homeowner on their site rents his property for 18 weeks of the year (about four months) and grosses around $28,000 annually (that’s in USD though). For property owners that may account for a large percentage of their mortgage on the property each year and properties in desirable locations will usually always increase in value year over year.
Before your clients rush headlong into this market, however, be sure they’re entirely aware of the ongoing costs of maintenance and management and repairs.
4. Stage Properties Being Sold
Prospective buyers like to imagine what their life might look like if they were living in a home. Marketing an empty house means it may be hard to sell, and that’s also true because would-be buyers pass judgment to some extent from the moment they view a property for the first time.
Pretty much everyone looking for a house begins their search online. For this reason, among many others, it’s a good reason to tell home seller clients that they should stage their house. It’s a well-known fact that homes that are staged sell more quickly, so the expense of bringing in furniture, adding temporary character and charm touches, artwork etc. so the potential buyer can get a better idea of what this house looks like lived in is ALWAYS beneficial
5. Generate Leads Using Direct Mailers
This old-school method still works as well today as it ever has, especially if you hone in on your desired target market. You can expect the same ROI as you get from social media marketing, and direct mail outperforms all digital channels. In terms of cost-per-acquisition, it’s also very competitive.
The only downside to direct mail is how difficult it is to track where leads are coming from, or where they see you for the first time. However, there are ways to track direct mail that may take a bit more effort or a slightly larger expenditure.
Sign up with Real Estate Leads here and receive a monthly quota of qualified, online-generated buyer and / or seller leads that are delivered to you exclusively. Sign up and request your region of an city or town in Canada (provided it’s still available), and once you have it you’ll be the only realtor receiving these leads. Again, it’s an opportunity – but if you come across as a reputable professional you’ll likely turn these individuals into clients and be growing your real estate business that much more quickly.