Real estate businesses are like any other: the ultimate goal is to generate income. But how can owners succeed in this endeavor? That’s the million-dollar question.
Fortunately, we provide some answers in this post. We look at what you can do now to boost your revenues and find cash streams that support your business between large transactions (helping you keep your cash flow healthy). Generating the cash you need to survive is more straightforward than you think.
Give Agents Tools To Close More Deals
One highly effective option is to give agents the tools they need to close more deals. Providing them with the training and resources to get clients to say “yes” to your proposals can be a highly effective way to win more business and get cash through the doors quickly.
Don’t underestimate the value of agents, especially in rental and commercial transactions. These professionals can often give buyers the nudge they need to take the next step and move toward a sale.
The main goal is to prevent buyers from experiencing “cold feet.” Many worry at the last minute about a property purchase and whether it is the right choice for them. Highly skilled agents can provide clarity on the matter and support individuals looking to buy.
Use A Flat Fee Service
Another option is to use a flat fee listing service instead of paying a hefty percentage. Flat fee options reduce risks and improve cash flow at the margins, helping to keep investors in good shape financially.
Jason D. White runs a listing broker service in the Texas area. He thinks it’s the future.
“There’s no reason more brokers like me couldn’t offer services like these,” he says. “The percentage fee is really just an industry perk. It doesn’t have to be that way, and many investors are twigging, realizing they can get better deals without it.”
Use Uncorrelated Properties
Another route real estate business owners can take is buying properties with uncorrelated income streams and using them to support their operations. This tactic is challenging because of the expertise and management it requires. But it is also highly likely to result in more favorable outcomes, including fewer damaging drawdowns.
For example, you might buy a farm in a rural area and an apartment complex in a major city. You could complement this with a marina operation, DoD-adjacent land, warehouses, and even toll roads.
The more you can add differentiated assets to your portfolio, the less industry-specific quirks will affect you. For example, a downturn in commercial real estate because of the pandemic is unlikely to affect prime land for mineral extraction in places like Colorado and Alaska.
Add More Income Streams
Related to this last point, it also helps to add more income streams. If you can add to the total number of individual revenue-generating assets, you can smooth your finances tremendously.
For example, if you currently own a property and rent it as two apartments, look for a way to turn it into four. You could add smaller properties, like paid public toilets, to your empire, giving you income streams that others won’t exploit.
