Strategies That Will Help You Grow Your Real Estate Business
If you’re establishing a real estate firm, you already know how vital it is to make money. After all, you need enough cash in the bank to keep your business afloat, let alone make enough money to buy that luxury vacation house in Jackson Hole, Wyoming.
The question is, what are the most efficient methods for producing that money?
The six methods and tulum mexico real estate listings below are used by real estate agents to generate extra revenue or maximize their present revenue. From becoming a broker to house flipping, we’re confident you’ll find something useful.
1. Repair and reposition it
You might not want to buy a house that requires so much work…
You’ve contemplated “flipping” if you’ve considered buying a property, fixing it up, and then selling it. To supplement their income, many real estate professionals turn to house flipping or assisting customers in house flipping.
While television shows make it appear as if you can make $100,000 on a flip, this is not the case. “The real money is not in hitting it big with one flip, but in flipping numerous properties that yield a moderate profit,” says Mark Ferguson, a professional real estate agent and owner of Invest Four More.
Flipping property entails a significant amount of risk. To make this method work, you’ll need to acquire a house for less than its market value and be able to precisely estimate the cost of repairs. It’s all about the experience.
The foreclosure market is a fantastic location to look for residences to flip. Sites like MLS offer a section dedicated to looking for such homes. Of course, depending on where you reside, this could be a competitive market.
Make sure you know the After Repair Value of a property before you buy it (ARV). You’ll almost certainly need the assistance of a real estate professional to figure this out, but you may get a rough estimate by looking at recent sales values in the same area.
Of course, you are not required to make any repairs to the property. You might also acquire at a discount and then sell as soon as possible. “You may make an average of $5,000 to $10,000 every deal, with very little effort and work,” according to JB House Investor.
We recommend that you read step two before getting started with house flipping (below).
2. Look for off-market properties that aren’t on the market.
You’ll have a hard time making money if you can’t find discounts before everyone else. Many of the homes that will make you money aren’t listed on the standard sites like MLS or Zillow. They’re not technically foreclosures, but they’re the ones the owner needs to get rid of soon.
An off-market property (sometimes known as a “pocket listing”) could be one owned by a divorcing spouse or one that an owner no longer desires, perhaps because they’re leaving the country or facing financial trouble. They’re the homes that owners can’t sell through standard means because they need to sell quickly. They’re the houses with the FSBO, or “For Sale by Owner,” sign out front. These are your precious stones.
You’re considerably more likely to get a property for less money if you find someone who needs money right away. These are the properties that will provide you with the best return on your investment.
Keeping an ear to the ground is a smart approach to find off-market assets. After all, you never know when a friend, acquaintance, or relative from your circle of friends, acquaintances, or relatives would come to you for assistance, either for themselves or on behalf of someone they know. Make a name for yourself. Become a member of organizations such as the Rotary Club and Business Network International. When a member of your network is in a bind, they’ll think of you first!
Try to network and create ties with estate attorneys in addition to the typical networking. They frequently have debtors that require immediate cash. They’ll be far more likely to sell at a discount as a result of this. Networking with wholesalers is also an excellent option, since they frequently buy low-cost homes in need of repair practically as soon as they become available, and then sell them for a rapid profit just days afterwards. They’re only interested in the short game, so if you like the long game, this can be a smart tactic for you.
Check out Auction.com if you’re interested in buying a home at auction. This site can be used to look for both residential and commercial real estate. Many of the properties on the site are priced low because they are in foreclosure or are owned by the bank.
3. Concentrate your efforts on the holiday rental sector.
Let’s talk about how you can profit, or how you can assist your clients in profiting: vacation rentals.
Having a house you can rent out to tourists during peak tourist season may seem like a no-brainer—you create equity in a wonderful location and have the opportunity to profit from the demand.
What happens, however, when the tourist season is over?
If you overprice your rental, you’ll likely have a dry off-season or at the very least an unstable period. All of those vacancies will add up, especially if you’ve employed a property manager to help you out. The true expense of a vacation rental, according to Mark Ferguson of Invest Four More, is the cost of managing and maintaining it.
The secret to a successful vacation rental is to keep the price low enough to have the home rented all year. If it isn’t possible, making sure you have enough throughout the excellent season is critical.
Despite cash flow issues, the vacation rental industry can still be a profitable business. The average homeowner on HomeAway, a vacation rental site, leases his property for 18 weeks of the year (about four months) and earns $28,000 per year. More than half of these home owners pay 75 percent of their mortgage each year, making it a superb long-term investment.
However, before diving headfirst into this sector, keep in mind the continuous costs of maintenance and management, as well as repairs. Are you capable of doing so, or can you assist your clients in assessing their needs and risks in order to maximize their return on investment?
4. Set up a staging plan for the property you’re selling.
Viewing a property may be an emotional experience for many people. They must envision what their lives would be like if they lived there. It may be difficult to sell an empty house if you are marketing it.
The majority of clients make a decision as soon as they see a home. If the only photos of the house you’re selling are of empty rooms, you might not be giving the best first impression, which is crucial to moving things ahead.
According to the National Association of Realtors, nearly everyone who is looking for a home starts their search online. In this instance, you should try staging the home to make it appear lived in.
Staging is popular for a reason: properties staged by an Accredited Staging Professional (ASP®) sell in 33 days on average, compared to 196 days for unstaged homes.
So, if you’re having trouble selling an empty house, consider bringing in furniture to give the possible buyer a better image of how the house would look if it were occupied, even if it’s just for the initial photo shoot!
5. Use direct mailers to generate leads.
This tried-and-true strategy still works today, especially if you narrow down your target market. In fact, it has the same return on investment as social media marketing.
According to a 2017 Direct Marketing Association research, direct mail outperforms all digital platforms in terms of response rate. It’s also quite competitive in terms of cost-per-acquisition, coming in at roughly $19.
Of fact, not all direct marketing is created equal, and “format” has a significant impact on response rates:
- Oversized envelopes result in a 5% response rate.
- 4.25 percent response rate on postcards
- Dimensional: a response rate of 4%
- Catalogs have a response rate of 3.9 percent.
- 3.5 percent response rate on letter-sized envelopes
The sole disadvantage of direct mail is the difficulty in tracking where leads come from or where they first see you. However, there are techniques to track direct mail that need a little more time or a little more money.
According to the same report, fewer firms use direct mail to target their clients. This implies you have the opportunity to stand out and attract attention right now.
6. Go through the broker’s examination.
To become a licensed real estate agent, all you have to do is pass the tests set forth by your state. This normally takes a few months, and it qualifies you to sell property as an individual real estate agent or as part of a larger company—though most states require new agents to first work under a broker for a few years.
What you can’t do with this license is start your own real estate firm and recruit other agents. To do so, you must first become a broker.
You will be able to create your own real estate agency and collect commissions from the real estate agents who work for you after passing the broker’s exam.
Because most brokers take 20 to 50 percent of an agent’s commission, it makes sense to become a broker yourself—not only because you’ll make more money, but also because you won’t be losing money.
