New real estate agents face plenty of challenges in their first few years in the business. If they can overcome those challenges, a respectable salary awaits. According to data compiled by the National Association of Realtors, the median gross income of REALTORS® was $39,800 in 2017, a decrease from $42,500 in 2016.
However, some real estate agents want to go above and beyond their earnings. Or they want a reliable income source for those times the sales aren’t there. Slow spells happen to even the best real estate agents—the market sputters, winter slows down business, or they encounter simple bad luck.
Not every dollar a real estate agent earns must be commission-based. You can apply your experience to other property-related disciplines and increase income that way. Here are some revenue streams agents can perfect to earn extra cash.
Managing rental properties is a naturally complementary side job for real estate agents. You already know hot neighborhoods and current market conditions, and that knowledge can easily be applied to finding and pitching to renters (many of whom might already be in your contact list). Property management doesn’t require a ton of extra work, meaning you’ll still have plenty of time for your real estate business. Also, listing and showing rental properties builds your reputation as someone clients can turn to when they become ready to buy.
People moving to a new city or state may not have the time to find a house or the resources to set up everything they need in their new town. Real estate agents who also offer relocation services can do much of the heavy lifting for these transplants and earn extra money along the way. Besides showing homes (or, possibly, rentals) to prospective buyers, relocation specialists can help get utilities set up, recommend moving companies, and provide a wealth of information to clients about neighborhoods, schools, local businesses, and so on.
Similarly, if your home market is a vacation destination, selling homes and listing rentals catered to out-of-towners offers another opportunity to increase your income. Airbnb might have taken some of the air from the sails of this strategy on the rental side, but many property owners still prefer to hire a live person help them rather than trust a website. Ambitious agents also may try purchasing vacation properties to rent out on their own, thus eliminating the middleman and potentially providing more revenue.
Many new real estate agents focus primarily on residential, but expanding to commercial can open a new revenue stream and provide some backup when the residential market is slow. Depending on the state you work in, you might need a separate license for commercial real estate, and you will want to go through some training in the discipline. Besides expanding your range, the contacts you make through commercial real estate may later turn to you for their personal residential needs.
A broker price opinion, or BPO, is a report banks or mortgage companies seek on a property. A home in which the borrower is behind on payments might be headed for foreclosure, and lenders will order a BPO to assess the property’s condition. This isn’t a full appraisal and usually just entails conducting an inspection of the exterior of the property and pulling comps, but it is more detailed than a competitive market analysis (CMA). BPOs are a great source of extra income for new real estate agents because they are relatively simple and draw on skills you already have and/or are honing.
Though a good deal of work is required to remodel a home, fix-and-flips can be lucrative—and some agents love personally working on the homes they sell. Moreover, real estate agents are already at an advantage because they know the market well and can better identify houses primed for flipping. Plus, as the eventual seller, you avoid the fees and hassles a non-agent flipper would go through to find a buyer and complete the sale.
For any of these gigs, some training and mentorship might be necessary—you just don’t become an expert at flipping houses or offering relocation services overnight. Often, working with a good brokerage, especially one associated with a hyper-growth franchisor, can help. Top brokers bring years of experience to your career path, and their franchise partners may offer technology and resources to help new real estate agents succeed with their entire business. The first few years as a real estate agent don’t have to be scary with first-class support behind everything you do.