This article is part of a larger series on How to Become a Real Estate Agent.
There are a number of ways to make money in real estate without representing residential homeowners. For example, you can generate a profit by managing properties, investing in cities with growth potential, buying and selling houses through auctions, coaching, working in a leasing office, or becoming a contractor. While there are several tried-and-true ways to succeed as a traditional buyer or seller’s agent, this article reveals the unique and exciting alternative ways to earn a living in the real estate industry.
Here are the top 11 unique ways to make money in real estate:
1. Focus on an Uncommon Niche
The majority of real estate agents work on buying or selling residential properties, but there are many other types of real estate transactions available to licensed salespeople. For instance, a few common real estate niches are working with FSBOs (for sale by owner), expired listings, and commercial properties. These niches tend to be much less saturated by real estate agents, but still well-known and widely understood. Even with a smaller number of agents targeting FSBOs or expired listings, you’re still likely to face a lot of competition.
If you really want to establish a specialty and become the go-to real estate expert in your area, look for even more uncommon niches, like short sales, auctions, and pre-foreclosures.
Short sales happen when a homeowner gets behind on their mortgage payments and ends up owing more than the house is worth. Rather than fall into foreclosure, they can do a short sale, which is a complicated process. Thus, they need the expertise of a real estate agent with short sale experience.
Many agents don’t choose short sales as their niche because the process requires communication with frustrated, overwhelmed, and sad clients, as well as the following:
- An extensive amount of communication and negotiation with the lender
- Gathering important documents
- Contacting attorneys or tax professionals
- Finding a buyer
- Writing and submitting proposals
The amount of commission is negotiable, but can range from 6% or less of the sale price and is decided by the lender. Some agents enjoy working with short sales because they can truly help people in need, knowing that your paycheck isn’t coming out of their pocket. Plus, a strong negotiator may even be able to get a higher commission split.
Although short sales can be complicated, agents can learn the process, build relationships with lenders, and use their real estate expertise to help distressed homeowners in a difficult time in their life. This process tends to be a bit more involved and complicated than a traditional real estate transaction, which deters some agents, but also makes it a unique way to earn money in real estate.
Instead of following the typical process in the real estate market, auctions are a unique way to buy and sell houses. Most homes sold by auction are foreclosures or have a tax lien, but the condition or financial past of the property doesn’t change the ways that real estate agents can be involved with auctions, which include:
- Referring a home seller to an auction company: In this method, instead of working with the client to buy or sell their home, you will connect them with an auction company in exchange for a real estate referral fee.
- Helping a buyer purchase a home from an auction: Help buyers understand how different auctions work and evaluate a home before purchasing.
- Helping a seller register and sell their home by auction: Be the contact for the auction company and homesellers to list the home on the MLS, qualify potential bidders, and post-auction inspections and requirements.
One of the advantages of working with real estate auctions is that the closing process is about 30 days, so you may be able to get a commission check in less time. Plus, as you grow more familiar with the auctioneers and auction companies, you’ll be able to streamline the process for yourself and your clients
Pre-foreclosures, which are legally referred to as “lis pendens,” are often filed by a mortgage lender as soon as a borrower stops making mortgage payments. It’s the first notice to the public that a property is facing foreclosure.
Pre-foreclosures present an opportunity for both real estate agents and investors. As agents, you have the ability to help the homeowners sell their homes and get out of a scary financial situation. On the other hand, real estate investors have the ability to buy the home from the owners, which can also help relieve their burden.
However, there may be legal restrictions around homes in pre-foreclosure and the property may not be in the best condition, so it’s important for both agents and investors to analyze each pre-foreclosure lead to determine if it’s a good opportunity to pursue.
If you’re considering making money in real estate through pre-foreclosures, you’ll need REDX. REDX is a lead generation tool that can pinpoint pre-foreclosure leads and accurate contact information before the information is public, allowing you to reach the homeowner before the competition. Find out more about REDX pre-foreclosure listings today.
2. Invest in Cities With Growth Potential
Investing in real estate is one of the most common and well-known ways to build wealth. However, too many people limit themselves to investing only in their local area or the current hot markets. Instead, use your insight and connections in the real estate industry to evaluate cities all over the world, looking for those with the most growth potential.
By spending time analyzing locations before investing, you’ll increase your chances of buying a property that multiplies its value even faster and maximizes your return on investment (ROI). Look for economic data on different cities in reliable sources like the U.S. Census Bureau.
For example, the median sale price of homes in Tampa, Florida, in April 2019 was $235,000. However, in April 2022, the median sale price of the same homes increased to $390,000. In just a few short years, Tampa went from having a mediocre real estate market to Zillow’s hottest housing market in 2022. While many investors are gobbling up property in Tampa right now, the most profit is available for those who bought property in Tampa over the last few years.
Uncoincidentally, Tampa’s job market has grown by nearly 5%, and is projected to continue growing by 3.1% through 2024. As you look for cities and areas with similar growth potential, pay special attention to the job market and the employment industries. Single-industry towns are more prone to struggle, but areas with a large diversity of companies, types of jobs, and wage levels are set up well for population growth.
3. Become a Landlord to Make More Money in Real Estate
A landlord is the owner of a property who rents it to a tenant. The primary benefit to purchasing a home and renting it out is that you generate passive monthly income and own an asset that is constantly increasing in value. It’s also one of the most affordable ways to get into real estate investing.
However, it’s no secret that being a landlord can be difficult and unpredictable—especially without the right tools, resources, and preparation. At the very least, you’ll need to know how to calculate the right cost of rent, how to screen tenants, and maintain the property.
Luckily, TenantCloud streamlines every part of being a landlord—from creating a listing website, receiving rental applications, taking payments, receiving maintenance requests, and even managing a team. Completing these tasks manually can easily waste hours of time, but using TenantCloud can help you generate the same profit without having to be a full-time landlord. Learn more about TenantCloud.
4. Manage Properties
An alternative to being a landlord for a property you own is managing others’ rental properties. While property managers need to have specific strengths and knowledge, like marketing properties, screening tenants, and organizing documents, most states only require a real estate license. This makes it a great option for active real estate professionals or those who have a license but aren’t participating in transactions.
Property managers are responsible for a wide range of tasks and operations, which vary depending on the type of property. For instance, being a property manager typically includes:
- Consistently marketing vacant rentals
- Scheduling and hosting property tours
- Screening applicants
- Managing documents
- Managing vendors to maintain the property
- Communicate with tenants
- Evaluating and setting rental prices
- Renewing leases
- Following up on late payments
- Enforcing late fees or evictions
- Inspecting properties
Property management can be a full-time job, especially for large apartment buildings and complexes. However, you could also turn it into a part-time job for extra income if you have personal strengths in management and organization. With the right tools and software, you can streamline and outsource many of your tasks, like online rent payment services.
For example, Avail is a rent collection tool that’s easy for tenants to use and includes management features like credit and background screening, maintenance tracking, and state-specific leases. It also includes rental property accounting, so you can keep track of your expenses and income. Learn more about how Avail can help you manage properties with ease.
5. Work in a Leasing Office
Working in a leasing office is one way to make money in real estate without getting a license. Leasing offices are commonly found in apartment or rental complexes, but can provide services for a variety of different property types.
A leasing agent typically communicates with current and prospective tenants, receives payments, and follows Fair Housing laws as well as company policies. If you’re interested in learning about real estate management and investing, a leasing office might be an ideal place to start.
Search for “leasing agent” or “leasing manager” jobs on Indeed for more specific details about being a leasing agent in your area. If you’d like to get some training to help you in your job search, start by reaching out to local apartment complexes and property management companies. Ask about their requirements for leasing agents. You could also walk into a rental building to inquire about opportunities at that building or others that the property management company might own.
6. Become a Real Estate Coach
Real estate is a complex industry, whether you work as a salesperson, managing broker, or investor. As you actively work in the industry, you gain a lot of expertise about the real estate market, making and evaluating deals, and working with people. This knowledge and experience will naturally help you grow your skills and gain more success, but it can also be leveraged to help other professionals.
If you have a proven track record of success, consider offering your hard-earned real estate smarts as a resource. This could mean writing a book, developing a training program, or creating content on YouTube, TikTok, or a blog. Take time to research each possibility to choose the method that best fits your strengths.
For example, if you are a naturally charismatic speaker, a YouTube channel or podcast would be a logical fit. Mike Sherrard shows exactly how you can take your strengths and turn them into a money-making system. After he was ranked in the top 30 real estate agents in the world on social media, he started a YouTube channel and coaching business to teach others how to get clients and grow their businesses, specifically through social media.
For more information on creating your own YouTube content, check out our article 11 Ways to Use YouTube for Real Estate Lead Generation.
7. Call Landlords to Get Listings
As the real estate market ebbs and flows, there will be times when it takes intentional effort to generate more buyer or seller leads. When you want to focus more on selling listings, one unique way to get listing leads is through landlords.
Landlords and real estate investors generally own one, if not many, investment properties, and they may be waiting for the right opportunity to sell. Of course, the best real estate sales come out of genuine relationships, so reach out to your network first—or expand your network and make more connections with investors.
Find landlords to call by using databases like Reonomy or sometimes Google. Treat them as a potential source of repeat or referral business, so don’t attempt to make a hard sale on your first cold call. In fact, it may take 10 to 20 calls or emails to get in touch with a busy landlord, but your first goal should be to schedule a meeting with them, whether it’s over lunch, coffee, or even Zoom.
Before the meeting, make sure you do your due diligence and already have a basic understanding of the landlord’s business. Look up what type of properties they own, how they market and rent them, and how they’ve worked with real estate professionals in the past.
This information is easily accessible on Reonomy, a commercial real estate database designed to help you discover and research properties and property owners. You’ll be able to easily search for specific addresses, property types, or by name to get contact information, and then run campaigns to reach them by mail, email, and SMS. Try Reonomy free for seven days.
8. Flip Houses
Although the concept of flipping houses isn’t anything new, it’s still a legitimate and highly profitable way to make money in real estate. Flipping a house successfully means finding an undervalued property, doing repairs or renovations, and then selling the house for its new market value.
As a real estate agent or investor, you’ll have opportunities to find undervalued properties more often than the average buyer. Fixing and flipping houses is an excellent short-term investment strategy that can produce tens of thousands of dollars, but it requires a detailed understanding of what actually increases the value of a home and how renovations work.
If you’ve never looked for properties under market value, expect a small learning curve before figuring it out. Instead of searching for properties with specific features or in a certain area for clients, look for properties that aren’t in the best condition. Consider searching for properties with the following criteria:
- For sale by owner
- “As is” in the description
- On the market for over 30 days
- Foreclosure or pre-foreclosure
When looking for homes to renovate, you should also look in unusual places, like Craigslist, auctions, or Facebook groups for local investors. However, Zillow might be the only place you need to search. Dig into Zillow’s advanced search criteria to find homes that have been listed for long periods of time or include keywords like “as is” or “investment property.” Since Zillow is the most visited property listing website, it will house all the most up-to-date property listings available. Check out the inventory on Zillow today.
Typically, when you flip a house, you have to pay taxes on your profits. However, there is an exception in Section 121 of the income tax code. It says if you live in a property for at least two years, you can exclude up to $250,000 of your gain on the property. If you’re thinking about doing a high-end flip, consider this strategy to maximize your after-tax profits.
9. Train & Practice in Other Aspects of Real Estate
If you spend time as a real estate agent but realize that your skills and interests don’t perfectly suit the world of sales, consider trying a different real estate specialty. Even though agents are the most common type of real estate professional, they are far from being the only ones. In fact, there are a wide variety of real estate career paths that don’t include being an agent or salesperson, which include:
- Real estate appraiser
- Land surveyor
- Mortgage broker or loan officer
- Notary public
Keep in mind that some alternative career paths may require additional education or certifications. However, any experience you have in the real estate industry can help you become successful in whichever new role you choose. If you’re serious about getting another real estate-related license, research your state requirements for each career.
McKissock Learning has step-by-step guides, teaching you exactly how to become an appraiser, inspector, mortgage broker, or land surveyor, as well as top-quality online courses in each industry. In fact, McKissock Learning provides a variety of licensing, continuing education, and self-paced or livestream classes in almost every state—highly rated by hundreds of thousands of students. Learn more about McKissock Learning today.
10. Rent Sections of Your Home
You don’t necessarily have to purchase separate properties to benefit from having rentals. Try a method called “house hacking,” which basically means renting out a portion of your property to offset your own living expenses. Make sure to check your local regulations before trying this hack as some areas have zoning restrictions that prohibit renting out portions of your property.
For example, you could purchase a two-bedroom condo and rent out one of the rooms. Alternatively, you could purchase a multifamily property, live in one of the units, and lease out the others. If you’re looking to build your real estate portfolio with minimal upfront costs, house hacking is a great way to gain experience with landlords and property management.
You can even use house hacking to create a short-term rental experience. List your room or space as a “shared home” to open it up for short-term visitors. Short-term rentals can usually charge a higher per-night fee, but keep in mind that you aren’t guaranteed bookings. Make sure to list your space on Airbnb to generate a higher level of traffic and start gathering reviews.
If you don’t have any space inside your home to rent out, think about building a separate living unit or accessory dwelling unit (ADU) on your property. If you have land, you can purchase or build a small one-bedroom apartment and make your investment back quickly with renters. Before hiring a contractor, make sure you’re familiar with the laws and restrictions in your state.
11. Become a Relocation Specialist
If you’ve ever moved across the country, you know firsthand that it is a massive undertaking. Relocation specialists are real estate professionals who take this burden off movers by helping them sell their current property, find and purchase a new one, and orchestrate details like packing, hiring movers, transporting vehicles, and processing visas.
Since relocation specialists have to deal with varying laws and regulations in different states and countries, you have to pass an exam and become a Certified Relocation Professional. Being a relocation specialist may be ideal for real estate professionals who are passionate about traveling, seeing diverse cultures, and have strengths in organization, planning, and communicating with clients.
Making money in real estate isn’t quite as straightforward as getting hired for a job, but there are so many interesting and unique possibilities. Start by becoming a real estate agent, then try out different money-making strategies like house hacking or working in unusual niches.