Wealth Building Income Streams for Real Estate Agents
Did you go into real estate to build income or build wealth? This is a question that is often not considered enough by real estate agents. As an agent, your only stream of income is through your own sales efforts. You are solely dependent on yourself to provide the only source of income in your life. You have the flexibility to work when you want, but you don’t have the freedom to not work at all.
But isn’t that what you got into real estate for in the first place? To work less or maybe even to never work at all? To build enough wealth and passive income that you have both time and money freedom instead of only having money but never the time freedom to spend it?
So why is it that almost no real estate agents actually have both time and money freedom? Why is it so difficult for real estate agents to build wealth?
To understand that, we have to look at what the difference between wealth and income is and why so few people actually understand this.
Wealth vs Income
To build wealth is to have both time and money freedom. Plain and simple.
There are a lot of real estate agents that have a lot of income, but not a lot that has built a lot of wealth. That not only goes for the average agent but also applies just as much, if not even more so for the top 1% of agents in the US. And that is because the income streams for real estate agents lack almost every wealth-building component.
To build wealth you need 4 different components:
- Multiple Streams of Income
- Residual Income
In the traditional brokerage world, there are virtually no opportunities to build multiple income streams for real estate agents. That is because agents are limited to just the income produced from their sales. And sales income lacks all 4 wealth building components.
It’s one stream of income, it is dependent on you the agent so you can not duplicate anything, there is no equity for selling houses, and it is an active income stream that you only earn when you close a sale.
So now that you know why it is nearly impossible for real estate agents to build wealth, especially if they only focus on creating one stream of income. But what are the other income streams for real estate agents? Can real estate agents build wealth at all?
That is exactly what we are going to cover today. How wealth is built and what income streams for real estate agents are out there to build wealth so they can have both time and money freedom.
3 Wealth-Building Passive Income Streams for Real Estate Agents.
In the description of the 3 wealth-building income streams for real estate agents, we have broken down the three income streams to fit one wealth building component, equity, residual income, and duplication each. Then when you combine the three wealth building income streams for real estate agents along with your sales income, that creates 4 income streams total.
- Team Building
- Social Media
In this post we are not only going to go over why it is so important for agents to have multiple income streams so they can build wealth and have time and money freedom. We are also going to explain why it is necessary to have at least 3 income streams for real estate agents in order to protect their lifestyle, especially if they are heavily reliant on their sales income.
The first of the 3 wealth-building income streams for real estate agents is investing. Investing is a great way for agents to not only build equity, but also collect monthly residual income as well. Because investing is much more of a long term equity building strategy, we are going to focus on the equity component of wealth building for this income stream.
For real estate agents, the first asset class that they should consider investing in is real estate.
Rental properties are one of the most iron clad and stable assets to invest in to build equity and cashflow. On top of the many tax advantages that real estate provides for investors, investing in something that is tangible and immovable is one of the safest and most secure long term investing plays that you can make.
There are a couple of ways that real estate agents can invest in real estate. But in this section we are only going to focus on single family properties.
In the single family real estate space, there are a few different strategies that investors like to use to generate income. The most popular and best for wealth building is investing in long term rental properties.
When you invest in a rental property long-term you are taking advantage of every wealth-building component possible. The long-term appreciation will help you build equity that grows on its own. And the monthly rent that is collected not only helps you pay down your principal and interest on your loan but is also an additional monthly income stream for you.
Investing is one of the most advantageous additional income streams for real estate agents because real estate agents are already familiar with both the real estate market and the home buying process. Since real estate agents spend most of their time looking for properties and analyzing properties, they have a really good pulse on which home would be a good long-term investment.
Also, real estate agents are tuned in to their networks, so that means they are able to find more off-market deals and can get first looks at properties that have recently hit the MLS. MLS access for agents is a huge advantage when it comes to investing in real estate. Not only are you able to get access to every property that is on market, but you can also run your own comps and do your own property tours.
But real estate isn’t the only asset class that real estate agents can invest in. Stocks and shares in privately owned businesses are also an option for additional income streams for real estate agents to build equity. At some brokerages, shares of company stock are actually awarded to agents for certain sales milestones if the brokerage is a publicly-traded company. This is a great way for agents to acquire equity in the form of stock ownership without having to spend their own money to invest in stocks.
2) Team Building
The second of the 3 wealth-building income streams for real estate agents is team building.
Team building is the best way for real estate agents to build monthly passive or residual income so that they can have financial freedom and time as well as money. As a team leader, you are able to earn an override on your agents’ commissions from their sales efforts.
Building teams is one of the most popular wealth-building income streams for real estate agents. In fact, most agents build teams when they realize that they are unable to duplicate themselves in their own business and are looking to grow. It is also the most typical way that real estate agents like to plan for their retirement as well, by building a sales team or buying a brokerage.
Traditionally there are two ways to build teams in real estate. Becoming a real estate broker and opening your own brokerage or starting a sales team within your current brokerage.
There are pros and cons to each method. By becoming a broker, you are able to run your business however you want. You determine the splits, the brand, the systems, etc. As a broker-owner, you have to choose between either buying a franchise or running an independent office.
As a team leader, you must operate within a brokerage and abide by their rules and regulations while also using their tools and resources. But as a team leader, you aren’t liable for your agents’ actions legally and do not have to invest heavily in agent development or additional resources, which you are subject to as a broker-owner.
Team building as one of the residual income streams for real estate agents is the most popular way that top producing or entrepreneurial agents build time freedom on top of earning money. Because they are able to earn money every month whether or not they still plan on selling homes or not, they are able to earn income residually without having to spend time to create that income on a continuous basis.
Although both traditional methods of team building take a lot of time and effort to build, there is now a third way for real estate agents to build teams faster, and grow quickly to other markets as well. Agents at national or international independent brokerages like eXp Realty are able to earn residual income through revenue share. Now by simply sponsoring another agent to join the company you are able to make monthly residual income from that agents gross commissions revenue paid out by the company.
Revenue sharing is one of the most unique and lucrative income streams for real estate agents, and only a few brokerages have taken up this model.
3) Social Media
The last of the wealth-building income streams for real estate agents is social media. Social media is how agents can duplicate themselves in both their marketing and income generation efforts.
On social media agents have the ability to create content and duplicate themselves, their presence, and their message. As a marketing outlet, agents are now able to duplicate their presence online so that they are able to stay front of mind in front of their clients and leads. Instead of having to spend countless hours prospecting and running traditional marketing method, on social media, agents can create evergreen content that is viewable 24/7.
Also, many social media platforms offer means to create additional income streams for real estate agents. For example, YouTube has a revenue sharing system that pays its content creators through ad revenue generated from your videos. On top of that, you are also able to create products that you can sell through your influence on the internet. Educational material such as books, courses, and mastermind groups are all products that agents can package and sell to their audience as an additional income stream and a means of marketing. D
Duplication through social media can create multiple income streams for real estate agents. On top of product sales and ad revenue share, agents with a social media influence can also become affiliate partners and brand ambassadors. Affiliate sales are a great way for agents to make an additional residual income stream while also creating a brand that is bigger than themselves.
Out of all the mediums of social media, two forms of content stand out above the rest. Video content on YouTube, and blog content on Google.
The reason why these two mediums of social media are so powerful is because content created on these two platforms that are SEO reliant, are evergreen and more authoritative. They are also the two methods that can help generate the most affiliate sales and partners. Most social media content has a lifespan of a day up to at most a week after the content has been initially published, but Google and Youtube content are relevant months or even years after their initial publishing.
Multiple Income Streams for Real Estate Agents for Protection
Now that you know the multiple income streams for real estate agents to build wealth, let’s take a moment to understand why having multiple income streams is not only important for building wealth but also important in protecting both yourself and your lifestyles.
As an agent who only has one stream of income, you are always at risk of losing your income completely, especially if that one income stream is reliant on you only. When you decided to become a real estate agent your goal was probably to become an entrepreneur and not to have a job where the fate of your income is not 100% in your hands. But what happens if you want or have to step away from your business as a real estate agent? What if you had an emergency to take care of that can take a week of your undivided time?
What many agents don’t realize is that real estate agents are essentially just self-employed individuals who own their own job. It is still a job, but the only difference is, you own your job and you can choose when you want to work and how much you want to make. Like I mentioned early on in this article, real estate agents have flexibility, not freedom.
But what happens when you have to step away from your job? As an employee, you typically take unpaid leave. The same goes for those who are self-employed. Without multiple income streams for real estate agents, when you have to leave your job for some reason, you are unable to earn any income with just one income stream.
That is why having multiple income streams is so important for real estate agents. If you want your lifestyle and income to be protected you need at least 3 streams of income, 2 of which are residual income streams. The reason why you need to have 3 streams of income is that if you only have 2, and one of those income streams disappears, you are back to one income stream again.
Build Wealth as A Real Estate Agent!
Now that you know the 3 main wealth-building income streams for real estate agents, it is time for you to take some time and figure out how you can create all 3 income streams so that you can build both time and money freedom.
As an agent who needs to rely on their sales income to pay the bills, it can be difficult to find the time needed to create additional income streams for your “lake of life”. Although the 3 wealth building income streams we mentioned are all adjacent to your current sales business, it still takes time and effort to build these out to become a sustainable stream of income.
Many agents have heard of eXp Realty but not many know that it is a wealth creation brokerage. At eXp, agents are able to not only create an income through their sales, like they are able to at any brokerage, but they are also able to build wealth and create a desirable lifestyle for themselves. eXp offers 3 income streams for real estate agents, an equity component through the ability to earn stock awards, residual income through revenue share, and also equips you with the tools and trainings you need to build a social media presence to duplicate yourself and your business.
If you are ready to build wealth today and work at a brokerage that offers all 4 wealth building components and change your lifestyle, click on the button below and book a free no obligations strategy call today!