Starting Your Own Residential Real Estate Company: Additional Revenue Streams And Areas To Focus On
Residential real estate can be extremely profitable for anyone involved if they close a certain number of deals monthly. There are times where revenue is slow so creating additional streams of income can help stabilize company revenue. For those areas that there is never a lull it is important to eliminate those “slow” months and push even harder to keep home sale numbers consistent. Data being gathered during all processes is important and there are a multitude of tools that allow users to analyze data collected. This data can be anything from homes closed by an agent to email blast replies/conversions. The following are areas to focus on for a residential real estate company as well as opportunities for additional revenue streams.
Finding The Right Lenders
Finding lenders that not only give great rates but also are flexible can be tough to locate. Gauntlet Lending, an NYC hard money lender, would be the perfect example for individuals and state “we specialize in funding high risk loans for these unconventional borrowers. Whatever your needs, we have the perfect solution.” For a residential real estate company, the loan might have to come from a partner or from a bank. Partnering with a lender can turn the homebuying process into one a buyer can actually enjoy instead of constantly calling their agent then a lender. A few lenders at the company’s disposal is recommended though as at times lenders can be overwhelmed with underwriting.
Understanding And Studying The Local Market
Local agents tend to have a much larger advantage when compared to those new in the area. Being able to rattle off activities to do in a certain area or restaurants makes a buyer feel at home. Out of town agents can be hired but need to do an immense amount of studying to be as proficient in the area as their local peers. Studying the market does not just mean looking at the Zillow reports once monthly. Getting out and getting to know the area in a variety of ways needs to be required by a real estate company focused on selling homes.
Taking The Time To Build A Strong Agent-Base
Slowly adding agents that have done great things where they have worked previously is important. A track record of success indicates future success but putting prospective agents in training is also important. An apprentice system of sorts can be very useful in educating another wave of new agents to represent the company. A real estate agency is only as good as the people it has selling for it.
Additional Sources Of Income
Rental Properties For Areas Where The Market Has Dropped
Some residential real estate companies invest in properties that they think could turn a profit in a short period. This does not always go as planned as property values can plummet in areas making a home impossible to sell. The home might not be able to be sold but this does not mean it cannot be turned into a rental. Hiring a property management company will make this passive income as the last thing any real estate agency wants to deal with is tenant issues. The homes can be sold after the market has recovered or in the case of long-term renters it can stay in possible of the company. Do not take losses on a home when revenue can be generated monthly until the home can be sold at a profit.
Flipping houses can be a lucrative business for a real estate company that has quite a bit of cash flow. Purchasing a home cash can allow those contacts agents have accumulated to help with the project. Contractors are much more willing to negotiate if they are given a constant stream of work from a company or flipper. This does come with a risk though as even veteran flippers have issues when purchasing a home sight unseen. Great opportunities do arise and keeping an eye on the MLS will allow the company to identify unique homes to flip.
Lead Generation For Companies Out Of State
A digital marketing team that consistently produces results can be contracted out to other companies. This is not frequently done but for those that have teams that rank competitive keywords at the top of search engines this is possible. Agencies will pay top dollar for this as it is far easier than hiring an in-house team that may or may not generate the desired results. Most marketing teams have formulas they use for success so all they have to do is change the company name/website/and location to succeed.
Getting into the real estate industry has great potential for someone starting a company. Keep the tips in mind above and start adding additional streams of revenue to help stabilize company cash flow.