Financial Freedom for Real Estate Agents.
New and potential real estate agents often ask experienced real estate agents and brokers what the number one struggle is for real estate agents and those looking to enter the industry. Many experienced agents will say that it is finding the business maturity to work longer and less desirable hours than others in order to better serve clients and achieve more success. Some will say that it is the difficulty of dealing with a wide range of characters that emerge from their client base on a daily basis. And of course, most agents will say that it is generating enough leads to keep a consistent stream of income-generating business.
Although most of those answers, and more come from even the most experienced of agents in the industry, it is shocking to me that not a single answer that I have heard from agents, or read on Facebook forums or even YouTube comments have reflected the truth. And that is that the single biggest struggle for real estate agents, worldwide and industry-wide, is not knowing how to retire from real estate and how to achieve the goal of financial freedom.
It should not shock you to know that most real estate agents only earn one income stream, which comes from their sales. So why is it, that seemingly not a single person knows why it is almost impossible to achieve financial freedom for real estate agents?
If you understand the wealth quadrant and the cashflow quadrant, then you will know that real estate agents and the nature of their jobs as self-employed solopreneurs, give them no outlet to retire from real estate and makes it incredibly difficult to become financially free.
That is what we are going to cover in this post. The way that wealth and financial freedom is built, and why it is traditionally incredibly difficult to build financial freedom for real estate agents. The different passive income streams for real estate agents, and how they can leverage them. And the fastest and most efficient way for real estate agents to retire quickly, while also being able to live a better lifestyle.
Table of Contents
How Wealth is Built
In another post that I wrote, I explained why real estate agents work only for an income but not wealth and explained the 4 components that is needed for wealth to be built by anyone in any industry. To recap, in order for an individual to build wealth, they must have multiple streams of income, a residual or passive income stream, equity in assets, and duplication of themselves and their business.
For a traditional real estate agent that makes an income only through commissions, they are missing all 4 components of wealth. Real estate agents only make one stream of income through their sales, traditionally there has been no residual or passive income streams for real estate agents, an agent does not have any equity in their business even if they run a team because their own involvement in their business is essential for it’s success, and agents can not duplicate themselves. So to put it very blatantly, real estate agents who only sell houses can never live a financially free life.
But that does not mean that real estate agents can not build financial freedom and actually create the lifestyle that they dreamed about ever since they stepped foot in the industry. After all, we know that almost all wealth is built through real estate, it’s just that traditionally, real estate agents were simply on the wrong side of that coin.
To start to understand the ways for real estate agents to build wealth and how to retire from real estate, we should first start by determining and analyzing the potential passive income streams for real estate agents. Now out of the 4 wealth-building components, residual or passive income is the most important to financial freedom because it allows the agent to not just have money, but time and money.
The Cashflow Quadrant
In Robert Kiyosaki’s bestselling book, Rich Dad Poor Dad, he brings up the 4 ways that income is earned by an individual and arranges them into 4 points on the Cashflow quadrant. The 4 ways that an individual can earn an income are Employee, Self-Employed, Business Owner, Investor.
In the perspective of the real estate agent, most real estate agents land on the left side of the quadrant and are categorized as self-employed. The reason why it is difficult to build financial freedom for real estate agents is because of the fact that agents do fall on the left side of the cash flow quadrant. Agents can only rely on themselves and their work to earn active income and have no way of earning passive or residual income, where they put in the work once and can get compensated over and over again so that they can have both time and money freedom.
Having passive income streams for real estate agents is essential to their success if they are looking to build wealth and not just only an income. Because most agent’s ideal lifestyle is to be able to have money freedom AND time freedom, which is true freedom, they need a passive or residual income stream in real estate so that they can have income coming into their bank accounts every month on a consistent basis as well as not having to work commission to commission so that their personal involvement isn’t required for them to earn their income every month.
That is why for the rest of this post, my main focus is going to be introducing you to the different passive income streams for real estate agents and how you can take advantage of each of them.
4 Passive Income Streams to Build Financial Freedom For Real Estate Agents
We talked earlier about what passive income is and said that a passive income stream is one that allows the income earner to have both time and money. In our 4 top passive income streams for real estate agents to achieve financial freedom, we made sure to only income streams that allow the agent to only put in the effort and work once, and be able to earn that income stream over and over again every month with minimal, if any other effort.
We also tailored these choices to the specialty, expertise, and work of the real estate agents so that you do not have to spend an additional and overwhelming amount of effort to learn a new skill, start in a new industry, or do something that you are not essentially already doing on some level. Real estate agents have probably the busiest job of anyone, so it is important that the 4 passive income streams for real estate agents do not take extraneous effort to learn or create.
So without any further adieu, here are the top 4 passive income streams for real estate agents in 2021:
1) Rental Income from Investment Properties
The very first passive income stream for real estate agents is probably the most well-known and popular passive income stream not only for real estate agents but also amongst the general public as well. As real estate agents, you probably spend an enormous amount of time helping your clients every day look for their second, third, fourth, fifth, or even 30th property that the client wants to purchase towards their investment portfolio. It is no question that the best client and the best source of repeat business for real estate agents are from a savvy real estate investor.
Almost everyone on earth agrees that real estate is the best investment and that it is the best medium for any individual to build lasting wealth. After all, what is better than investing in the land that we all live and breathe on…but I’m sure that you don’t need to be convinced of this since I’m sure you have given this same speech and pitch many times to potential clients.
But what makes rental properties such a good source of passive income for real estate agents?
Well for one, real estate agents know exactly how to purchase a property and can do so faster, more efficiently, and with less effort than anyone else. Since it is literally the nature of an agent’s job to help others buy or sell real estate, many of which are investment real estate, it should be a cakewalk for realtors to identify a good investment and put in a good offer for that property. If you are unfamiliar with the advantages of real estate investing in general, click here and read our comprehensive guide to the benefits of real estate investing.
On top of the rental income that you will earn from month to month, by investing in real estate, you are also building your equity portfolio and contributing to your wealth in more than one way.
2) Affiliate Marketing
Next up on the list of the best passive income streams for real estate agents is affiliate marketing.
Affiliate marketing is when someone with a substantial social media or online influence and audience promotes a product or service through their platform to their audience in order to earn residual commission checks that are paid to them whenever a customer purchases that product or uses that service through the influencer’s unique link.
Many highly successful real estate agents have a substantial or even massive social media or online presence. In 2021, most agents who want to dominate their market and stand out above the rest of the crowd have already taken advantage of the opportunity for marketing and exposure on social media and have even built big followings. The way to turn that following into a passive income stream for real estate agents is through affiliate marketing.
By leveraging your current existing audience, you can build a passive income stream by simply throwing in an affiliate link on your website, social media profile, or blog and creating a small piece of content or even content within your content to promote that product or service.
Also, if you are worried about not knowing any products, services, or companies that will offer an affiliate program, you should start by asking your sphere of affiliated services that your client uses already. For example, if your client is buying a new home, your affiliate product could be a welcome mat or other home decor items. The best affiliate products are those that are related to your business and the content that you produce on your profiles.
Also, before you pick your affiliate service or company make sure to double-check your state and local compliance laws to ensure that you are not breaking any policies or laws.
3) Book Writing
Another one of the great passive income streams for real estate agents in writing and selling books for royalty payments. In today’s market, a lot of savvy and creative agents have already written their own books to use as marketing pieces for their clients or even referral partners to get more business coming their way. Royalty payments from the sales of those books can be a huge passive income stream for real estate agents especially if they already have a book written.
If you don’t have a book already, you can either write a book yourself or have a third-party company or ghostwriter write your book for you if you want to save more time. Also, do not limit yourself to writing books that are only geared towards the same audience as your potential real estate buyer, renter, or seller clients, you can also write and sell books that are for other real estate agents. If you are an experienced or successful agent, you can write a book about how you achieved your successes and sell it to other agents who want to have the same success that you do.
In the digital age today, we no longer have to go to a publisher and have them screen and approve books to publish and sell for royalty payments. In 2021, independent authors can publish their books through online publishers and distributors like Amazon Kindle and immediately publish and sell their books for a good passive income stream of royalty payments.
The reason why earning royalties from books is such a great passive income stream for real estate agents is that it requires very minimal effort to maintain while it is created, allowing maximum time freedom. Another great alternative to this is by creating a video course series that you can sell online to potential clients or other realtors.
4) Revenue Share Team Building
The last of the top 4 passive income streams for real estate agents, and in my opinion, the best passive income stream for real estate agents is revenue share team building.
One of the biggest struggles for real estate brokerages in 2021 is to recruit and attract top talent to their brokerages and keep those agents at their brokerage for the lifespan of that agent’s career. Because the attrition rate in real estate is so high, real estate brokerages have to develop new and innovative ways to attract agents to their brokerage and retain them as well.
Revenue sharing is one of the ways that brokerages are now able to differentiate themselves in order to attract the most talented agents from around the world to their company. Revenue sharing is the brokerage’s way of giving back to the agents and rewarding the real estate agent for their efforts to help grow the company.
At real estate brokerages that offer revenue share, real estate agents are able to earn a percentage of the company’s total revenue earned from the production of any agents that they either directly or indirectly recruited or attracted to the company. Because most revenue share models pay agents continuously from month to month based on production to the company, revenue share is generally a passive income stream for real estate agents. In most cases, revenue share is one first real stream of passive income for real estate agents that traditionally only sold homes to produce an income.
In my opinion, revenue share is the single most revolutionary and powerful passive income stream for real estate agents because it does not require the agent to learn any new skills or invest money into a second business. It is a program offered at their brokerage that they can use at their will by attracting other agents to their company and be able to earn a residual and reoccurring income stream that they otherwise would not have. Although revenue sharing is still a relatively new concept to the brokerage world and for agents, we have already seen many agents of all experience levels achieve great success with it and actually build financial freedom and their dream lifestyle from it.
Change Your Life Today and Build Financial Freedom!
Now that you have seen the 4 best passive income streams for real estate agents, it’s time for you to make a decision about your life and start building the lifestyle that you have always wanted ever since the day you became. areal estate agent.
At The Agent Wealth Collective, the number one team of wealth-building real estate agents in the world, we equip motivated agents with the tools, network, skills, training, and assets to build a life that they have always dreamed of and build wealth through all 4 of the passive income streams as well as through other wealth-building components such as equity through stock awards and duplication through social media. Come learn more about how you can be a part of our team today and build wealth in real estate so that you can create a life of time and money freedom!