How to Expand Your Real Estate Business
Agents who say they’re looking to expand their territory generally mean they want to buy real estate leads to make more money.
This can be done by expanding not only their geographic sphere but also their categorical sphere. Most agents are familiar with the concept of growing geographically, but expanding categorically means broadening the types of properties you list and sell and the services you offer.
For example, residential real estate agents could consider targeting commercial properties, rentals, or property management opportunities. Brokers who know value and are good at valuations can generate extra revenue by performing BPOs (Broker Price Opinions) or appraisals. Property management for vacation rentals and Airbnb homes is another avenue for a steady revenue stream. And remember referrals!
In this article, we explore how to expand your real estate business to new spaces and categories to maximize revenue.
Key Takeaways:
- Growing your business can mean so much more than expanding your territory. Today’s market offers a plethora of opportunities to make new connections and try different categories.
- Market research should inform all of your decisions about category expansion. Properly understanding buyer behavior, property value, emerging neighborhoods, and market demographics is an essential part of a successful strategy.
- Being able to give and receive referrals can seriously enhance your business. The article contains some tactics for becoming this type of agent.
The Importance of Market Research
Conducting thorough market research is fundamental to expanding your real estate business. Understanding buyer behavior, property values, and emerging neighborhoods can help you make informed decisions. This research identifies potential opportunities and helps mitigate risks by highlighting market challenges.
To broaden the types of properties listed or add new services to a real estate business, agents should get smarter in the following areas:
- Emerging neighborhoods – Identify up-and-coming areas with potential for development and investment. Look for factors such as new infrastructure, schools, and amenities.
- Market demographics – Analyze the demographics of the target market, including age, income levels, and lifestyle preferences. This can help tailor property types and services to meet specific needs.
- Property types in demand – Research current trends in property types that are gaining popularity, such as multi-family units, vacation rentals, or eco-friendly homes.
- Investment opportunities – Explore opportunities for investment properties, including commercial real estate, industrial properties, or mixed-use developments.
- Rental market trends – Study the rental market to understand demand for short-term vs. long-term rentals and consider adding property management services for landlords.
- Sustainability practices – Look into sustainable building practices and energy-efficient properties, which are increasingly appealing to eco-conscious buyers.
- Homeowner services – Consider adding services that cater to homeowners, such as staging, home inspections, or renovation consulting.
By researching these areas, real estate agents can diversify their offerings, stay competitive, and better meet their clients’ evolving needs.
Analyzing Industry Trends
Staying updated on industry trends is crucial. Trends such as remote work influencing housing preferences or shifts towards sustainable living can shape your business strategy. Regularly analyzing reports, attending industry conferences, and following real estate publications will keep you informed and adaptable.
Understanding Local Markets
Each local market has its unique characteristics. Understanding these differences enables you to tailor your offerings to meet specific needs. Engage with local community members, participate in local events, and study demographic data to gain insights that can give you a competitive edge.
How to Expand Your Real Estate Business: 7 Tactics
Join a Larger Network
Joining an MLS with a larger service area opens up new markets. Real estate licenses cover the entire state, but traditional MLSs focus on smaller markets. Some brokers may be skeptical because the mantra in real estate is “you need to know your local market,” but many agents do know the area outside of their local MLS. Often, another market can be just a few miles away if you live on the border of the MLS coverage area. Some agents may think they need to join the surrounding local MLSs to be competitive and expand their territory, but that isn’t the case.
Ten years ago, I started the first and only Statewide MLS in New York because I had to join seven MLSs just to appraise in the area that I covered. Once NY State MLS was established, our team wanted to expand our footprint, so we created My State MLS. Now, agents can list anywhere they are licensed. I met a Florida real estate agent who works in the Southeast part of the state in Palm Beach County, but she spends a lot of time in Naples on the west coast of Florida. So, this agent is very well-versed in both geographic areas. Because of that, she is expanding her team to the Naples area to do business during her time there. This agent is a member of My State MLS and will use it to help her break into the new territory.
It can also be helpful to join a real estate team with a large geographic footprint. When joining a team, you get support from the other team members, who may have connections in other areas but may be too busy to handle all of the work. This is a good way to use your resources and break into a new area.
If you live on a state border, you can get a second license for an adjoining state. Often, these agents will need to find a new broker licensed in that state unless your current broker is also licensed in that state or you are a broker. If an agent wants to get multi-state licenses, they should check with the licensing division for states that have real estate reciprocity agreements. When a state allows reciprocity for licensees, it is much easier to become licensed in that state.
Take Advantage of Referrals
Referrals are a great way to expand your territory and make more money. Both getting and giving referrals are great ways to make money. The best way to get real estate referrals from other agents is to connect with agents around the country, especially in areas where homeowners in your area tend to move to or move from frequently.
For example, many New Yorkers end up moving to Florida, and plenty of Floridians have friends and family in New York who may need a licensed real estate agent. Florida agents can be the first to hear about new buyers heading to their area when they build relationships with those New York agents. In exchange, they can refer their clients’ family members to their New York counterparts. This increases business for both agents and helps them make some side income through referral fees.
Become an Agent that Gives Referrals
It is possible to become an agent who uses only the best real estate lead generation companies to gather leads and then refer them to other agents. First, it is vital to have an excellent online presence. A well-designed website that allows you to collect leads and is easy to navigate is critical.
Social media presence is also essential. You can hire a marketing company to help you build and promote a real estate website once it’s complete, or you can set up your website yourself if you know how. Make a budget for what you can spend on marketing and stick to that budget.
Once you have a good real estate lead generation website and online presence, you can collect leads from your IDX website that may not be in your area. When you get these leads, don’t discard them; find a real estate agent in that area and refer them out. You can even be proactive in getting these leads by advertising your website in a larger footprint. Since these leads were captured off of listings, they will typically be buyer leads, however, that buyer may also have a house to sell.
You have to have a good relationship with the lead in order for them to trust you on the referral, so make sure you help them as much as possible before referring the lead out.
Become an Agent that Receives Referrals
Most brokerages have referral programs. These programs come at a cost, but the ROI can be worth it. Some nationwide brokerages have their own national referral program, but if you are with an independent brokerage, there are still many resources available to get referrals.
If your broker doesn’t already have a built-in network from their franchises, independent brokers join referral services like Leading RE or Referral Exchange. When you join a referral service, you can expect to pay a percentage of your commission to the referring agent. There is no standard fee, so it is possible to negotiate these fees and terms.
It is also possible to become a referring agent by capturing leads in a larger territory. This can be accomplished by putting up websites that have listings that are outside of your territory. If you are a good marketer and know how to put up a website with good SEO, or if you are willing to pay for internet advertising, you can capture a considerable number of leads from outside of your main area.
When thinking about expanding categorically in terms of referrals you can join affiliate marketing programs that pay residuals monthly when you recommend customers and other affiliates. There are brokerages, mortgage companies, tech companies and more that have affiliate marketing programs.
Speak with an industry expert agent advisor. Together we will find the best solution based on your goals and needs.
Explore Affiliate Income Streams
Affiliate marketing referral programs are a way to make recurring monthly income. Affiliate marketing is a form of real estate marketing in which a business provides a commission to the affiliate for each new customer that the affiliate brings to buy the business’s products or services.
The business that sells the product or service pays referral fees to the affiliates that bring new customers. There are also programs that pay affiliates for signing up other affiliates, so it is not just about selling a service or product but also about helping companies build relationships. There are many different types of companies connected to real estate that have affiliate marketing referral companies. My State MLS also has an affiliate referral program. Mortgage brokers are also starting to get into affiliate referral marketing, and since the mortgage and real estate sales industries are closely linked, you should think about joining an affiliate marketing program in a related industry.
Research shows that the average affiliate marketer earns $8,038 per month, and the global affiliate marketing industry is expected to increase by 63% in the next four years. The numbers show that this is an area worth exploring.
Apply Real Estate Expertise to Other Services
If you’ve been in the industry a while, then you’ve probably had countless questions from both buyers and sellers about things like inspections, contract negotiations, long-term rental scenarios, and more.
If you are particularly knowledgeable about any of these areas, you can consult for an hourly fee (as long as the situation doesn’t present a conflict of interest). Many real estate agents moonlight as home inspectors or work on staging homes that are for sale. If you’ve become known in the industry for top-notch open houses, consider starting a side hustle of event management, where you help other agents set up and execute memorable open houses.
With the explosion of short-term and vacation rentals, many people who are not in the same city as their property need management. You can collect a monthly fee for managing their rental website, ensuring the property is in good shape, arranging cleaning services, and handling disputes. This work isn’t without its headaches, but can be a reliable income stream for someone comfortable with these property types.
Think about the talents you’ve developed and the connections you’ve made as part of your real estate background. Chances are, there are some creative ways you can expand your offerings to provide even more valuable services to your clients.
Work with Investors
Prices are not as low as they once were, but the market is cyclical, and we may see low prices again eventually. It’s during these periods that many entrepreneurs try to scoop up more properties. If you know the right people and are interested in making new investments, this can benefit you as well. Helping investors to purchase multiple properties at attractive pricing is a pretty surefire way to establish a long-term, mutually beneficial relationship. Then, along with these connections, you can have your own investments and work on passive income streams.
These are just a few of the answers to the all-important question of “how to expand your real estate business.” Make sure to check out our blog for more advice on real estate trending topics, technology, and tools.
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