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 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.
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 these national sales, you'll need to offer property management services. This is where my warning comes into play. Property management is a tough business to start. There are numerous challenges and 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?
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.
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.
Property management is a tough business, and you should consider all of the challenges before getting involved. See the related articles below for a summary of property management lessons learned. 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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