Whether you’re a new Agent or a seasoned one, you know that cash flow is king in this business. If you don’t have a contingency plan in place for surviving a dry spell, at best, it sets you back. At worst? It can cost you your business.
With interest rates up and Buyers and Sellers on edge, I’m starting to see headlines speculating that “The Market Is Stuck”, or asking “How Far Can Homeowners Expect Home Values To Drop In The Coming Year?” Yikes! You know what they say… when the going gets tough, the tough get going!
Real Estate Agents, like most independents, may need to consider sources of supplemental income when the market goes south. At the very least, I hope this list of options gets your wheels spinning. and helps you come up with some possible cash flow solutions. Being forced to keep your business afloat during a sustained downturn isn’t fun – but it doesn’t have to feel like a loss, either.
Read On For 12 Income Building Options For Agents To Consider During A Market Downturn
Make small investments in your future income – minimal effort options:
- Ramp up your referral business
With minimal effort, one of the first for agents to consider is ramping up their referral business to agents in other markets. There are some market conditions that will impact everyone regardless of location (interest rates, for one), but chances are that other locations don’t move entirely in sync – so that leaves your business open to the flow of other markets.
Dedicate some time each day (or week!) to connect with agents in other markets. Look for networking groups on social media, and start your outreach! The payoff might not be instant, but you’re planting seeds for your business and networking… two things that are never a bad idea.
2. Recruit Agents to your office
If your office has a profit sharing program, this effort is a no-brainer. There’s no better time for an agent to make a move to a new office than when business is slow. Think about the agents you’ve connected with over the last year or two, and start with the ones who you enjoyed working with most. If you can get some agents in your downline, their deals mean a dose of passive cash for you.
If you’re happy with your brokerage, just speak from the heart about why you like it there. The conversation can unfold naturally if you’re sharing from the heart, and even if you don’t convince anyone to jump ship… you’ll have improved your relationship with each agent in your attempts. These connections are invaluable over time – and will pay dividends in other ways in the future (if not sooner!).
3. Refresh rental photos for any investment properties you own, to maximize rental income over the next lease cycle
Many Agents acquire a rental property (or a few!) over the years. If you’re a landlord, it’s time to take a hard look at your rental marketing. Even us Agents can neglect to keep listing photos up to date! If it’s been a while since you updated yours, trust me… it’ll be worth going to the extra effort. I’ll bet you can find areas to improve so your rental listing is sure to get noticed.
Reread your rental ad with fresh eyes, and think about the prospective tenants you’re hoping to attract. Make sure you’re highlighting any area hot spots, parks and nearby amenities. Many restaurants and retail establishments have turned over post-pandemic. Update your descriptions with any applicable changes, so you can hit the ground running when your current lease is up. You might even consider re-shooting the interior photos if your tenants are receptive to the idea, and have the place looking nice.
4. Expand into a new market area for expanded leads
Chances are, you’ve established areas of your city as niches. Can you think of some neighborhoods you’d like to break into, but don’t know as well? Can you invest some time in exploring those areas and getting more familiar with them? Incorporate outings in the areas you’d like to get to know better, and drive around while you’re there! Do your grocery shopping or errands in a part of town you want to get to know better. Make note of some of the area hot spots, and start some MLS searches to get a better feel for listings in the area. Broadening your expertise will help you cast a wider net for leads, and leads = deals.
Making larger investments of time and energy will translate into big dividends for your future business. These next income options require a more extensive effort, but they’re worth considering:
5. Invest in a cash flowing rental property
If you don’t already own investment real estate, this could be a time to consider it… and you can read up on all sorts of investment property topics over here. While it may not be an option for everyone during a down market (especially if you don’t have access to savings for a down payment), if it IS an option for you, I probably don’t have to remind you that a down market is a great time to buy one. Scour the MLS for your diamond in the rough. If prices are down, you chances to cash flow improve, especially if you can find a property that needs some work (and will thus not appeal to the masses).
Slower markets make it possible to negotiate more favorable terms (like Seller paid closing credits!), so perhaps you can combat unfavorable conditions like high interest by buying down your rate. Doing the market research will also give you an updated pulse on the investment property market, which in turn makes you more equipped to represent Investor clients. You may find that you uncover leads just by sharing about your own search with your sphere.
A cash flowing rental property can be a huge win over the long haul, and it can even set you up for passive income in retirement. If you don’t already know, teaching Agents about retirement planning is something I’m pretty passionate about.
6. Expand your business into a neighboring locale by joining a second MLS
Target areas near your town where you already like to spend time. Do you have a mountain or beach community you like to frequent for weekends away? Do you have family or friends that you visit frequently, who live in a place where you’d enjoy expanding your business and spending more time? Is there a market you’re considering for a second home? In my market, we have lots of resort areas within a couple hours drive time, so many agents specialize in a resort town in combination with the city where they reside. Imagine how many leads would come your way if all the agents in your office knew that you were the go-to agent for a nearby (but out of MLS) locale.
7. Join an Agent Showing app, and get paid to show property for other licensed agents in your downtime
There are several of these apps out there – and the idea is that any licensed agent can sign up to show properties for another Broker. You won’t get any new deals this way (there are legal agreements involved in onboarding), but it’s an easy way to make some cash during slower periods in your business.
These apps will generally allow you to set up your target area, so you can make it convenient and only show properties close to home. Once business picks back up, these apps are also an ideal way to keep your Buyers happy while you’re away on vacation and unable to show homes in person. Showami and SHOWforME are a couple of examples, but there may be others operating in your location.
8. Make physical improvements to an existing rental property or roll it into a property with a higher rate of cash flow by utilizing a a 1031 exchange
You’ll be that much more of an asset to your clients if you’ve done recent home improvement projects, or walked through a process like a 1031 exchange yourself. You’ll have an edge on what things cost, and what pitfalls to avoid. Physical improvements to a property will take time, but focus on low cost, high impact projects. Take the advice you give to your own clients about improving curb appeal, updating paint, and addressing deferred maintenance. These things don’t have to cost a lot to have a noticable impact on the rental rate you can collect.
These last few ideas require the most time investment, but have the best potential for generating serious income down the line:
9. Create a better website (or a first website) for your business
A great website is a lead magnet. Neglecting this will slow passive leads to a tiny trickle. Get serious about updating your site – whether you plan to build it yourself, or outsource it. The time and effort is frontloaded, no doubt… but once it’s in place, it will work magic for you. How to go about this (and what to focus on) is a topic for another post, but know that a website update will take time to pay you back. SEO takes time, so invest in the future when the downturns come your way and you have the extra time.
10. Branch out to a new platform by starting a Podcast or YouTube channel
Using a new platform will get you in front of new users. It’s that simple. You’ll hone your skills over time, and you’re sure to network your way to new leads along the way, if you share openly with others about what you’re working on as you go. Your best supporters will follow you to your new platform, and from there, you’ll have a whole host of new eyes and ears to reach.
It’s no small feat to tackle, but there are SO many free resources and podcasts to teach you how to use these types of systems as lead generation tools… it might not actually be as hard as you think once you dive in. Just be careful not to jump into the deep end when you’re just getting started. We don’t want you to end with too much on your plate, feeling the signs of burnout (which will ultimately hurt your business. But if you stick to a reasonable pace, and you’re okay with pressing ‘pause’ when your business picks back up, this can be a nice little side-project to fill in the gaps when you have seasonal slow downs in your business.
If you keep coming back to this as a long-term project, once it’s established, the passive income options that it provides just might be your ticket to financial freedom. Well played.
11. Start a side hustle
Think about the tasks that your business requires of you, and which elements of it come naturally. What do you look forward to doing? Is it keeping active on a snappy social account, or updating your business financials in a massive spreadsheet? Is it shooting the interior photos for your listings, or designing a modern brochure template for your real estate flyers?
Consider the skills you already have, that you could bring to the table to help others. The tasks you enjoy most might be the ones that others are struggling with. Sites live Fiverr allow you to freelance your skills. The best part? You can easily turn on and off the side-hustle flow as needed, so you don’t sacrifice your main gig (your own Real Estate business).
12. Go back to the basics – act like a new Agent
Think like a new Agent, and get back to basics! Take the opportunity to refresh your branding, update your Real Estate headshots, and pull the updates across all facets of your business. Having a streamlined brand and a fresh-faced (and current) headshot will go a long way in keeping your business from falling stale. You might find some great headshot tips here!
Don’t underestimate the value of keeping up with past clients, either. Channel your new agent energy, and get back in touch with clients you haven’t heard from in a while. Engage on social and stay top of mind with your active supporters. Sometimes the simplest tasks have the most meaningful return.
Whatever approach you decide is best for you, remember that down markets are temporary. Your Real Estate business is worth fighting for, so consider these alternative income options before things are dire – and you’ll be set to keep your business strong through the storm.