We all want to be successful real estate agents. That’s our number one goal, and that’s the reason why I’ve set up my website and my YouTube channel– to help other agents thrive, in the way that I’ve been able to. But, I haven’t always been successful. There are months where I have averaged multiple listings per week, and there have been months where I’ve only had one listing, if that.
When I got to a point where I had more income going out than coming in, I realized that something needed to change. I love my quality of life, and I wasn’t willing to make lifestyle cuts when I could easily just make more money. If I was going to maintain my life as a real estate agent without having to find another job that could hurt my ability to show property, I needed to find a way to make passive income. Passive income is basically income that you make consistently, and with little effort from you. Easier said than done, right? I actually found an extremely easy and lucrative way to increase my passive income, which was to focus on the rental market in my area.
By focusing on the rental market, I don’t mean that you should buy a bunch of investment properties and become a landlord yourself. If you had $200,000 lying around to buy a property you probably wouldn’t need passive income. What I mean by focusing on the rental market is to use your real estate license to help people in your network find a place to live.
Not everyone has the money to buy a home, but everyone needs a place to live. I’ve experienced that as a young agent, most of the people within my network were in need of rentals, and not necessarily looking for property to buy. I wasn’t necessarily going to get people that wanted to buy a house when most of my friends are in their 20’s. The next thing that I realized, was that there was a valuable opportunity for me to make some extremely quick extra money because of a surplus of people looking to rent.
You see, your real estate license allows you to work as a middleman between someone looking to rent, and an apartment complex looking for renters. This works for the client because they don’t have to search as hard for a place to live, this works for the apartment community because they don’t have to spend money advertising to find new renters, and this works for you, as an agent, because it’s a constant flow of extra income in referral commissions.
This is a pretty easy process to start for a couple of reasons. For starters, most other agents don’t want to fool with rentals because they realize it’s a fraction of the money they might receive from a listing or from their buyer closing on a house. They also don’t realize that although this process is less money, it’s also a quarter of the work. You don’t have to drive clients around, show them properties, or do any paperwork. Most of these apartment complexes have people on site and all the renter has to do is walk in the door and give your name! They will handle the paperwork, they’ll even show the apartment and sell it, and you get the credit. In many cases, you can make this valuable income at home, in your pajamas, simply by clicking a few buttons on a phone or computer.
If you’re intrigued, and this sounds like something you may want to try in your area, here are the four steps to creating a passive income stream from a rental market:
- Find and capture leasing clients — You may find people in your network, friends of friends within your network, people looking for a space to rent on Craigslist, or even people commenting that they need an apartment on Instagram or via the Facebook marketplace. Connect with them and put them in your database. It’s important to understand what each one is looking for so that you can match them with properties that fit as they become available.
- Learn how the Leasing Process works — By being fluent in the leasing process, you’ll instantly gain credibility and potential renters will listen to your advice, over trying to handle the rental process themselves. After all, why would anyone turn down good information that is at no cost to them? You’ll be able to prepare them for background checks, deposits, and anything else that may come their way.
- Know how to work with the Apartment Community — You’ll want to meet the folks who work at the leasing offices around town and introduce yourself to them. You’ll need to know their practices and procedures to explain to your clients, as well as establish a way to work together. Perhaps they’ll text you when new units become available, or maybe they’ll just give you access to their database. You’ll also need to figure out how renters will indicate that you’ve referred them so that you can collect your commission.
- Convert Renters to Buyers — I’ve shown you how to establish a great passive income at this point, but you’re missing the best part — these renters will one day need to rent again, and one day want a place to buy! When that happens, you’ll need to be their trusted agent to put them in that new property. By treating them like valued clients throughout the entire process, they’ll come to you again and again for their housing needs.
If you’d like to know more about this process and how it works, click here to watch a training on how you can make money in the rental markets even if you don’t have a large database of people to sell you. You can also watch the YouTube video on this subject.