How much have you REALLY heard about revenue share? For us Real Estate Agents, Revenue Share is one of the newest – and most lucrative – centers of wealth. Providing agents with an extra stream of cashflow income, revenue share checks off two of the most important aspects of building long term wealth.
Most real estate agents dream of owning their own brokerage, so that one day they won’t have to work anymore. But in reality, this only requires MORE work! Consider these “fun” new aspects of becoming a broker:
- The costs associated with owning a brokerage
- The time needed to manage, train, mentor, and support your agents
- The legal liability, risk, and oversight required
- Generating leads and assigning them to agents
- Finding and hiring more agents
- Hiring and managing support staff, accounting, taxes, payroll, legal
- Building and growing the business
It is FAR MORE work to be a broker/owner than a sales associate.
At Agent Wealth Hustle, we like to focus on building wealth through cashflow and having streamlined income streams not stress! So, let’s dive into how revenue share works and how it can jump start your retirement as a real estate agent!
What is revenue Share?
Revenue share is when a company shares its income with its employees. Applied specifically to real estate, revenue share is when a brokerage share’s its revenue with their agents for helping them grow the company.
So basically, you get a slice of the brokerage’s earnings without having to take on any financial or legal risk!
What advantage is there for a broker to pay agents to recruit rather than doing it themselves?
Consider this example: Let’s say it costs a broker $3,000 in ads and hours of interviews to hire one agent. Let’s also say one agent nets the broker $30,000 a year on average. What if instead, the broker pays you that $3,000 for every agent you bring to the company? Now you make $3,000 more and the broker still nets the same amount!
Revenue share is truly a win-win:
- The company now has ALL the agents helping with hiring
- The broker can pay the same amount of money to his/her own agents rather than on advertising
- The agents get to net more income every year, making them want to stay with that brokerage
- The agents get paid to recruit, which can explode company growth
- The broker can focus on supporting current agents instead of hiring
Now, let’s talk about the 3 big advantages of some revenue share models:
- You can build your revenue share while conducting sales activity
- Revenue share earnings are indefinite and repeatable
- Tiered structures allow for exponential growth
1 – You can build your revenue share while conducting your regular sales activity
The best part about revenue share for real estate agents is that you can grow revenue share income and your sales business simultaneously. Because it requires zero investment, you just need to leverage some effort as a rock star real estate agent.
Consider this: there are 2 million active real estate agents in the US. Do you think any of them might be interested in your brokerage’s model? Do you think in your daily transaction networking, you might interact with agents looking for something new?
You can look to your existing network of real estate agents in your sphere of influence. How easy would it be to take some time and show them a brokerage model that can net them more commission and help them build long term wealth?
One of the most interesting aspects of revenue share is that you can grow it at your own pace, right alongside your current sales business. Attract one agent a year? Great! Attract one agent a month? Great! Attract one agent a week? You get the idea. The faster you grow your revenue share, the faster you can achieve your financial goals for retirement.
2 – Revenue Share Can Be Indefinite and Repeatable Leveraged Income
Revenue share models that can help real estate agents build wealth through cashflow are structured so that the earnings shared with agents are based on two things: how long the recruit is productive for the brokerage and how many agents you bring to the company.
Revenue share earnings are indefinite
At Agent Wealth Hustle, we emphasize revenue share models where earnings continue year after year for every agent you attract. Your broker is earning more each year for each agent you bring – so you should earn more indefinitely too!
This means that as long as the agents you bring on continue to be a productive agent for the brokerage, you will continue to get paid. It’s like having a mini-company of your own without expenses, management, or liability!
Revenue share earnings are repeatable
Example: Your broker agrees to pay you $3000 a year for each agent that is productive for the company. If you bring 10 agents to Brokerage XYZ, that’s $30,000 a year in extra income every single year!
To reiterate, for a revenue share model to work well for building wealth through leveraged residual income, agents should earn indefinitely (for each agent they bring) and should earn repeatably (for each agent joined!).
3 – Revenue Share Can Be Scaled Exponentially
Some brokerages will base how much revenue share you earn, not only on the productivity of the agents you personally brought to the company, but also on the productivity of agents THOSE agents brought to the company! A model like this support exponential income growth!
How you can scale revenue share exponentially:
You bring 10 real estate agents to brokerage XYZ and are paid $3,000 annually for each agent – that’s an extra $30,000 a year. Each of those 10 agents bring one agent to brokerage XYZ and your broker agrees to pay you $2,800 a year for every year that those agents are productive for the company. That’s an extra $28,000 a year on top of the $30,000 – $58,000 in total!
Following the same example, now think about if each of your 10 agents brings on 10 agents themselves. That could generate an extra $280,000 a year! Would that be life changing? Would that accelerate your retirement? We would hope so!
Early adopters have the most to gain
These models are much more lucrative for early adopters. Entire brokerages with tens to thousands of agents can join at one time. Shoot if all you did was find one brokerage with 100 agents to switch over to your company, you might be able to retire right then!
Think about this: the longer a brokerage with a beneficial model is around, the more it will grow. The longer it grows, the fewer agents are left that haven’t already joined the company. Early adopters of Netflix, Google, and Amazon are winning today, why shouldn’t you get in on the ground floor?
With being an independent broker/owner comes headaches. Do you think that a few of them are looking for a better, more profitable way to run their business? For many broker owners, partnering with another brokerage can reduce liability while providing the support they and their agents need to take their business to the next level.
- You can grow your Revenue Share team while excelling as a Real Estate agent
- Real Estate Revenue Share models that help agents build wealth pay agents indefinitely
- Tiered Revenue Share models can be scaled exponentially
And perhaps the most important point: early adopters have the most to gain.
A critical tip
Some revenue sharing models can be done on a national or even international scale, rather than just for a local franchise. This means that you can attract real estate agents not only locally, but in other cities, states, or even countries! There are over 2 million active real estate agents in the US alone, just think about the potential for growth!
Wait! What about liability?
Since you usually don’t need to be a broker to participate in a company’s revenue sharing plan, you don’t take on broker liability. You don’t even have to manage a team, as many revenue sharing brokerages have systems, training, tools, support, and employees in place already to help your agents with contracts, tech support, on boarding, etc.
That doesn’t mean you can just leave them all on their own with no support. Usually you still need to offer value to those real estate agents and point them to the right direction. Luckily there are proven ways to do just that!
What’s the catch?
Now you’re saying: “Aha! I KNEW it was too good to be true.” Well actually, it IS all true. But here are few things to keep in mind:
- Revenue share earnings depend on productivity of the agents: agents you’ve brought and agents they’ve brought have to closing transactions in order for the company to pay you revenue share
- You have to remain a licensed agent with that company to benefit
- You take on an obligation to assist the agents you directly attract by pointing them to the right tools and resources to succeed – everyone wins by helping each other! Isn’t that the best kind of model?
How can I leverage this model?
Now that you know how revenue share works for real estate agents, the next step is finding a company that offers the right model for you. You can learn more about our favorite brokerage model here.
And definitely check out our Ultimate Guide to Revenue Share for Real Estate Agents and our Revenue Share Calculator Demo.