WARNING: What I’m am going to suggest in this article is not easy, but it offers three very profitable opportunities for your business. In fact, you’ll have to launch one very challenging business to tap into the three profitable opportunities I will share.
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 of the ways to side-step this small-market challenge is to take your business to the national level. You would do this by marketing in national publications. For example, you could run your best lead-generation advertisement in USA Today, which is a national newspaper with a subscription base of more than 2 million readers. Think about the number of leads you could generate from just one ad!
Maybe this doesn’t make much sense to you on the surface; the majority of national readers probably aren’t looking to move to your area. But what if you shifted your marketing toward real estate investors? You might be surprised to find a large group of people who might be willing to invest in attractive income properties in your area.
To capture these national investor sales, you will need to offer property management services. This is where my earlier warning comes into play. Property management is a tough business to launch. There are numerous challenges and several hurdles to overcome.
However, property management services allow you to sell homes to investors outside of your market area. This ability to take your business national could be extremely profitable for you. Think about advertising in the Wall Street Journal or Investors Business Daily. What type of prospect would 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.
