Hustle and grind – both terms we use a lot in the real estate industry to describe how much hard work is needed to be successful.
But what if I told you there’s a source of revenue sitting right under your nose that will generate not only an impressive income stream, but deliver a substantial windfall when it comes time to cash in.
In fact, it earned me $850,000 a year. Here’s how I did it, and more importantly, how you can too:
Rent roll pros
A year after leaving an agency and starting my own business, I decided to build a rent roll.
It wasn’t high on my list of priorities, but to be honest I just got sick of saying no to people that asked if I could handle their property management as well as sales.
I started with one property, and then two, and so on. By adding about 50 properties a year organically over six years, it grew gradually until I had 300 properties under management.
That created a great additional income stream of $850,000 a year – and it delivered an impressive $2 million payday when I eventually sold it.
If you want to leverage the work you’re already doing now, to create wealth and freedom for you and your family, building your own rent roll should be a priority for you as soon as possible.
The market is running hot at present – no doubt – but experienced agents know these things can change dramatically and without warning.
Unfortunately, when the hot market stops, the bills won’t.
Property management is an agency’s cashflow. It will tide you over during the lean years, and keep you going as you build back toward another peak.
Source of listings
Don’t underestimate how powerful rent rolls are as a source of potential listings.
Every one of those properties is an investor who could cash-out at any point.
If you service them well and cultivate the relationship, they’ll come to you when they’re ready to sell. And remember – many landlords own multiple properties, so you don’t have to network with 300 owners to access 300 potential listings. Target those owners with more than a couple of investments and the listings will flow.
Grow at your own pace
This is the one asset with a growth rate agents can control. You can choose to aggressively add properties to the rent roll and give your income a boost, or temper your growth depending on your available support staff.
Also, once your management systems are in place and your staff are suitably trained, the operation becomes automatic. I personally devoted little time to the daily operation of my property management business… and it just kept paying!
One thing to avoid
There is one other way you can generate income from rental properties that doesn’t involve starting a rent roll – but I wouldn’t recommend it as an option.
Agents working for agencies will often refer managements to their Principal and receive a small referral fee in return; often half one week’s rent.
The truth is that these fees are minuscule compared to the benefit the rent roll owner enjoys. As usual, the hard-working agent is getting screwed in the deal.
My pro tip is to skip the referral fee model and, instead, utilise your skills to start your own.
Rent rolls are a great side-hustle, provide an impressive income, and are valuable assets when you’re ready to cash-out one day. Building your own is yet another reason why, as a successful agent, you should work for yourself.