WARNING: What I’m about 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 these three profitable opportunities.
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.
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!
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.
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 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. Not bad.
The next profit opportunity for you with property management is the ability to sell the homes that you have under management. An agent I coach includes a clause in each of his management agreements that gives him the ability to sell the managed homes and earn full commissions on each sale. Obviously, the terms of the contract would have to be acceptable to the investor. Think about it: If you 50 homes under management with clauses that allowed you to sell those homes, you would have 50 listings in your pocket. This would be an extremely attractive asset.
Property management is a tough business, and you should consider all of the challenges before getting involved. Another option would be to find a great property management company and refer your clients to this company. This might give you the ability to take your business national without having to provide property management services yourself. However, you would lose two of the profit opportunities available through property management: monthly management income and the ability to sell homes under management. You would still have the ability to generate leads in national publications.
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