Cash Flow is Everything
I have a saying that I tell agents all the time “Rentals pays your rent and sales buy your home”. Agents that do rentals have much quicker and consistent cash flow. It just makes sense. The advantage to rent a few properties a month while you are waiting for your sales to happen or close is a huge asset.
I want all the agents I train to become top producers that make great incomes and enjoy a fabulous quality of life. One of the common denominators of high earners is that they had the ability to “survive” the early years. You have to learn how to survive and pay your bills in this business before you can get rich. Agents that are able to rent property have the wherewithal to “last” in this business and work through the ups and downs of the economy.
After the financial crisis in the fall of 2008 I had many, many meetings with former top sales agents that were struggling to make ends meet. I had so many similar talks with people that I wrote a story based on them. It is titled “Bitter Bob”. It’s about an agent in a lot of pain both financially and emotionally. I hope you read it to understand just how valuable “rentals” can be when the going gets tough for you.
Rentals can also have a measurable impact on the cash flow of the brokerage. I have sat many times with owners of companies suffering a cash crunch. They have sales business on the books but it’s closing in the next quarter and they have bills that they need to pay now. A viable rental business generates consistent monthly cash flow virtually year round. As the owner of the company you have to pay your overhead regularly. Even if your revenue from rentals doesn’t cover your entire monthly nut it will still help a great deal.
Whether you are an individual agent or the owner of the company you don’t have to go to business school to realize the multiple streams of revenue are a good thing. In most of the country the sales end of the business can be quite seasonal. Fortunately the peak times for rentals in many markets coincide with the slower periods for sales. Well trained agents proficient in both sales and rentals make more consistent income and therefore just plain produce more. This is a win-win for everybody.
About Greg Young
Greg Young is the owner and President of Broker Heaven NY, a real estate training and consulting firm located in Manhattan devoted to helping agents and companies reach their full potential. Greg has trained thousands of agents over his 30 year career and has created numerous rental and sales training programs.