RISMEDIA, September 23, 2009—WARNING: What I’m 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 all over North America. Some are in small cities. Small cities, unfortunately, come with small populations, and that limits agents who want to build a large, thriving business. In smaller markets, it’s difficult to generate a big number of leads, and leads are what drive sales.
You can side-step these challenges by taking your business national. You take your business national by marketing in national publications. As an example, you could run your best lead-generation advertisement in the USA Today. This national newspaper has a subscription base of over 2 million readers. Imagine the number of leads you would generate from just one advertisement.
I realize this might not make a lot of sense because the majority of these readers aren’t looking to move to your area. However, if you shifted your marketing towards investors, you might be surprised to find hundreds or thousands of investors 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?
Most agents who consider property management services only “see” the monthly management income. This income is attractive and can be engineered to cover all of your overhead expenses. If you have 50 homes under management and you charge $100 a month, your business collects $5,000 a month without having to sell one home.
An additional profit opportunity available to you with property management is the ability to sell the homes you would have under management. One agent I coach adds a clause in his management agreements that gives him the ability to sell his managed homes and earn full commissions on each sale. Obviously, the terms of the sale would have to be acceptable to the investor. Think about this: If you have 50 homes under management with clauses that allowed you to sell them, you would have 50 listings in your pocket. This would be an extremely attractive asset for your business.
Property management is a difficult business, and you would have to consider all the challenges before getting involved with it. Another option might be to find a great property management company and refer your clients to this company. This would still give you the ability to take your business national without having to provide the management services yourself. However, you would lose two of the sources of revenue available through property management: the monthly management income and the automatic listings you’d hold for the homes under your management. You would still have the ability to generate leads at a national level, though.
Rob Minton, who reinvented his real estate sales business to sell 269 homes to a limited number of clients in one year, has written a very practical book on how real estate agents can sell more homes.