As a real estate professional, it’s not unusual for one thing to continually pop up in your mind — money.
When you’re running your own business, you’re responsible for bringing in the revenue that pays your bills, your salary and maybe even your team. So it’s no surprise that finances are a constant concern and thought – especially if the market conditions changed suddenly.
But, while these concerns are normal, they don’t have to be stressful. There is a way to lighten the burden of a real estate business’s financial concerns. It’s by creating additional revenue streams.
Why you should start creating additional revenue streams
An additional revenue stream is pretty much what it sounds like — another way to make money for you and your business. It is a supplemental income that you receive in addition to the main revenue stream that defines and mainly supports your business.
Having this type of extra revenue stream is important for a few reasons. It helps you:
Prepare for disruption and changes in the market
When you diversify your offerings, you have something to fall back on if the property market goes quiet or a new competitor opens up in your area.
Build your industry authority
When you have multiple product and service offerings in your industry, it positions you as a leader in your field. You can build authority, stand out from your competitors, and increase the value of your other offerings.
Build longer lasting relationships
By diversifying your service offering, your clients become much more “sticky” to your business. Provide a great experience and they become clients for life for more reasons other than just selling or leasing their properties with you.
Ability to test other markets
When you build revenue streams that are different from your primary income source, you can learn about new markets and industry opportunities. You might find that a service you thought would be secondary has a high potential for growth and you might shift your plans for what your business will offer as a primary service or product.
Why real estate businesses are in the box seat for this
The interactions that real estate professionals have with sellers, buyers, tenants, landlords and developers are typically at the start of their real estate journey. Some have pre-approved finance in place but for many, their real estate journey begins with seeing a property they like, followed by an enquiry to… you guessed it… YOU. Followed by getting all of their other ‘ducks in a row’.
You might be thinking “I already get additional income through my referral partners.” But what if they weren’t referral partners but instead fully integrated into your business?
Take Coronis as just one example of a real estate group leading the charge, offering a range of solutions for each stage of someone’s real estate journey – before, during and (long) after a transaction.
With a team spread across the country, Coronis offers a range of service options on their website catering to different stages or needs of a property owner (not just buyers and sellers).
When you understand the lifecycle of real estate consumers, it becomes clear just how much value a real estate business and an individual agent can offer property sellers, buyers, investors, renters and developers whether it’s through partnerships, referrals or ‘whitelabled’ products under your own brand.
Stages for a seller:
- Pre-sale (I’m about to sell)
- During sale (I’m on the market)
- I’m under contract
- Pre-settlement (I’m unconditional)
- Post-sale (I’ve sold)
Stages for a buyer:
- Pre-sale (I’m looking to buy – pre-approval)
- During sale (making offers, bidding at auction)
- I’m under contract
- Pre-settlement (I’m unconditional)
- Post Sale (I’ve bought)
What services do you, or can you, offer at each of these lifecycle stages to add value?
Rethinking the sales funnel
If you’ve never heard of it, the Flywheel Model was brought up as the anti-thesis to the sales funnel.
Unlike the funnel that puts customers as an afterthought in a marketing and sales strategy, the Flywheel Model puts them at the heart keeping customers happy, allowing them to drive referrals and helping the company make sales.
The concept of ‘keep in touch campaigns’ is something real estate agents are familiar with – the idea that you maintain a relationship with clients post-sale in the hope they’ll choose, or refer, you at some point in the future because of the value you’ve added to their lives beyond a transaction.
But introducing new revenue streams can add a whole new layer to your relationship with clients post-sale and instead of relying solely on your ability as an agent to keep in touch with past clients, they’re gaining value from you by merely being connected to the other services you or your business provides outside of just selling or leasing their property. And when the time comes for them to sell or rent their property again in the future, all of the additional services you provide get to benefit once again.
All of this said, the success of adding additional revenue streams relies significantly on your ability to maintain service levels in each of these areas. A chink in the chain can quickly derail any benefit you would gain from adding new revenue streams.
It’s invebitable that the hot market we’re in right now will turn around at some point. Just like the GFC reminded real estate business owners of the value of their rent roll, a quiet market should be seen as an opportunity to leap frog your competitors by offering an experience they don’t.
There’ll be the same amount of agents competing for fewer listings so what other income streams can you plug into your business to future proof your revenue for the not-so-hot times?