I’ve always heard, or at least thought, that the quickest way to becoming wealthy is not necessarily by having a high-paying job or even a successful business, but rather by having multiple streams of income. My thought process is that in doing so, you can create a safety net for your business, which results in greater financial security.
Luckily, I have the great fortune of running a Facebook group of high-producing Realtors, so it’s rather easy for me to poll many people at a time. So, I decided to bring this question to my group.
“We have always been a family that loved and understood the power of multiple income streams,” Andrew Franklin, partner at The Franklin Team, texted me.
“There are so many opportunities to make money throughout the entire life cycle of a transaction. Once we realized that, it was natural for us to start other businesses that could feed off our real estate sales business and capitalize on our relationships in the industry.”
In addition to making sure we can endure tough situations, like what COVID-19 brought on, multiple revenue streams also work to grow your personal net worth. Here are four ways to diversify your team‘s income streams.
1. Take stock of what other businesses are closely aligned with your core business
For example, if you’re selling a lot of homes to investors, perhaps serving them as a property manager would be an easy next step. In addition to sourcing their projects, you can even be a source of hard money. If you sell a lot of homes every single year, year after year, perhaps owning a title company would be a great next step.
“I wanted to be less reliant on income from real estate sales and I saw an opportunity to add revenue streams that would allow me to succeed with others, so I could spend more time with my family,” Ron Wysocarski, CEO at Wyse Home Team Realty, wrote.
2. Aim to create at least 2 new streams of income for your business
It’s not always plausible or even possible to add multiple streams at once, but doing this will force you to think differently than you currently do. The reality is that you’re capable of more than you realize.
Once you’ve successfully added a new stream (or two), revisit this idea. In essence, challenge yourself to get creative. Even if you don’t pull the trigger on two new sources, the mere fact that you’re thinking about it will force you to open your mind to new possibilities.
3. Remember that passive or residual income is also a revenue stream
Maybe instead of being a real estate agent who sells the investment homes, you become the real estate agent who buys the investment homes. Or perhaps instead of being the agent, you become the owner or one of the shareholders in your real estate brokerage.
Revenue share from eXp Realty and profit share from Keller Williams Realty seem to be popular forms for adding residual income as well.
As Jennifer Schumacher, agent at Russ Lyon Sotheby’s International Realty, wrote: “Every Realtor should have a side hustle of rental properties! Make money while you sleep.”
4. Never lose sight of your primary source of income
Once you begin a new venture, it can be easy to lose sight of how you got there in the first place. It can be easy (or appear that way) to build up new residual streams. However, you have to make sure that your core business is remaining intact, performing well and hopefully, growing. That way, you’ll always have a solid foundation for your business, which will help control your financial stability.
Kevin Kauffman is an agent with eXp Realty and the host of the Kevin and Fred Show, a podcast for the real estate industry.
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