If you are a real estate agent, you are probably swamped trying to build your business.
Finding new clients, keeping existing clients happy, and doing the million things that go into closing a deal and collecting that commission can keep even the most organized of us fully occupied.
But what if you had some nice passive sources of income to supplement the income you earn from your job as a real estate agent? You can keep doing what you do best, but still earn some extra cash without too much additional effort.
That’s going to be the focus of this article.
We will cover nine great passive income strategies that are targeted for real estate agents and that utilize the strengths, expertise, and relationships that you already possess.
Let’s get into it!
The information contained in this post is for informational purposes only. It is not a recommendation to buy or invest, and it is not financial, investment, legal, or tax advice. You should seek the advice of a qualified professional before making any investment or other decisions relating to the topics covered by this article.
1. Rental Property Investing
Perhaps the most natural passive income strategy for real estate agents is rental property investing. It is a path that many real estate agents choose, and for good reason!
Why are rentals so great? You get cash flow, appreciation, tenants paying your mortgage and tax benefits to boot. And they also act as an inflation hedge because property values and rents rise with inflation, while your mortgage payments stay the same (if you get a fixed rate loan).
Why Rental Investing Is Especially Well-Suited For Real Estate Agents
Look, you are already in the business of real estate. You have access to incredibly valuable information and tools that the rest of the population does not have. They include:
- MLS data (this is huge – you can use this powerful tool to find great deals, motivated sellers, etc.)
- Superior listing options – you can list your rentals on the MLS and access a bigger pool of tenants
- Understanding of local markets
- Strong referral network (other real estate agents may call you if they know you are an investor and they have a deal that is suitable for you)
- Contacts with good contractors (this can be invaluable if you want to reliably service your rentals at a fair price)
All of this means that you enjoy a sizable advantage when compared to the rest of the population if you want to invest in rental properties.
How Much Work is Involved in Rental Property Investing?
Not as much as you may think.
On average, I spend on average about 5 hours per month on it (that’s for all nine properties that I own). And I self-manage them, so you can make the process even more passive if you use a property manager.
How Do You Get Started Investing in Rental Properties?
There’s no secret here.
I saved like hell and tried to buy one quality property near my house each year. Sometimes I was able to buy more, sometimes less. Eventually, I built up a nice portfolio, developed a reliable and cost-effective team to handle repairs and maintenance (this is done through trial and error), and figured out how to automate a lot of stuff so that things mostly run on auto-pilot now.
As a real estate agent, you will have no trouble getting started.
You already have a huge head start when it comes to identifying the right property and know the mechanics of closing a deal. Just find a great cash-flowing property in a great neighborhood and buy it.
It really can be that simple.
If investing in rental properties sounds interesting and you want to learn more, here are some articles that I wrote that you may find helpful.
2. Invest in Real Estate Partnerships
Another passive income strategy that can generate some great profits for you is entering into real estate partnerships. In fact, my long-time real estate agent (and friend) whom I consulted for this article has done this several times with great results.
He has relationships with builders and developers and when they want to fund a project, they reach out to him (and others) to see if they would like to invest in the project.
They usually invest as limited partners (which means they are passive investors and just collect money). The general partner is the developer who is responsible for actually completing the project and managing it once complete.
You may have heard of this type of arrangement through another name – it is sometimes referred to as real estate syndication.
This is the old school version of real estate crowdfunding and it has been going on for a long time. Speaking of real estate crowdfunding…
3. Real Estate Crowdfunding
Real estate crowdfunding has become a popular way for people to invest in real estate without directly owning or managing the underlying properties.
It is a method used by companies to raise money for real estate investments from a broad range of investors. These companies typically operate online platforms where investors can review real estate investment options.
If the investor finds something that they like, they can invest in it.
Investments can span across a wide range of real estate, including individual houses, apartments, shopping centers, and office buildings. The offerings can be structured in a variety of ways but are typically structured as equity or debt deals.
This strategy can be a great for real estate agents to get some passive income because they should already be familiar with real estate and know whether a given investment makes sense.
The downside to this strategy is that many real estate crowdfunding platforms have steep minimum investment amounts and often require that you are an accredited investor (which is basically someone who is a millionaire or very high earner).
But there are options for non-accredited investors.
I like Fundrise and invest with them personally. They have really low minimum investment requirements. As of the date of this article, their starter package only requires a $10 investment.
If you join them via this link, you can be part of their “refer a friend” program where you (and I) can receive $50 worth of bonus shares for signing up. If you want to help support the blog and also get some free shares, it’s something you may want to consider.
To learn more about real estate crowdfunding and to see how it compares to traditional rental property investing, check out my article on the topic here.
4. Become a Real Estate Lender
Another great passive income strategy is to become a lender.
This includes hard money lending, which is often used by flippers who need a short-term loan to fund their flipping activities and are willing to pay high interest rates and points to make it happen.
The key to success here is making sure you are protected if the loan goes south. This means underwriting the loan with enough margin of safety (equity).
That way, if the borrower defaults and you have to take back the property, you will still get your money back because there was enough equity in the deal. But since you are lending to folks investing in your local area, it should be pretty easy for you to analyze the property and see if there is enough equity in the deal to protect you.
Returns can be attractive, with many hard money lenders charging 8%-10% interest rates and 2 or more points on top of that.
5. Give Referrals To Out of State Real Estate Agents
You can build up a great source of passive income by acting as a referral source for homebuyers in your area looking to move away. This is a slick little ninja tip that very few agents use, but can be really effective.
It works like this – you advertise on social media (and elsewhere) to people in your local area who are looking to move and state that you have connections with local agents everywhere.
Most people don’t know where to start when trying to find a local agent in an unfamiliar area and may appreciate a recommended “referral.” When people contact you, all you have to do is put them in touch with an agent in the area they are looking to move to.
You then have that agent split the commission with you for the referral. It can be a pretty sweet set-up.
6. Affiliated Business Arrangements (Title Companies)
Another way in which real estate agents can generate passive income is by building a relationship with a title insurance company and working out an arrangement where they will pay you for clients that you send their way.
You’ll need to disclose this relationship to your client and follow all of the rules and regulations applicable to this type of arrangement, but it’s done all the time.
It can be a great source of consistent extra income for you without a lot of work on your part.
Word of Caution: Although this strategy can generate a fine source of passive income, you need to make sure you comply with RESPA requirements and not be too aggressive pushing this on your clients or you could land in hot water.
7. Start a Real Estate Blog
If you have a penchant for writing, you can also start a real estate blog. It can address any area of real estate that you want to focus on (or any area of interest really).
Here’s how it works. Every article you write is a line you are throwing out into the water that can generate passive income for you in the future. If an article starts to rank on Google (or gets traffic through other sources), then you can start monetizing it.
Blogs are generally monetized through ads or affiliate links placed on the website. That’s just a fancy way of saying you can get paid every time someone visits the blog and views or clicks on an ad or buys a product you are promoting through one of your affiliate links.
It’s really that simple.
So as long as people are visiting your site, you are going to keep earning money. And unlike other businesses, there is no physical location to oversee, no inventory to manage, no marketing needed (if you write good articles, Google sends traffic your way), no customer complaints to address, no employees to supervise, and no orders to fulfill.
If this sounds intriguing to you, check out my article on How to Start a Blog From Scratch.
I cover all of the key areas you need to know, including how to set up your website and most importantly, my best tips for writing great articles, getting traffic to your blog, and monetizing that traffic.
If you don’t have the time or inclination to do this on your own, you can hire a service to create a website for you. Make Lemonade is a UK based firm that specializes in this.
I have used their content writing service to help me expand my blogs when I was running short on time, but they do offer a full service model, where they will create your website for you from start to finish and include content that has gone through their rigorous keyword research process.
Check them out here if you want to learn more.
Ebooks and Online Courses Are an Option Too
If you like writing, but prefer writing longer form content, you may want to write an e-book instead. You can write one and sell it on Amazon KDP or Apple Books. This can provide a stream of passive income for years to come.
If you want a complete guide to making money with eBooks, check out my article: Making Money [Passively] Writing eBooks: A Simple 5-Step Guide.
You can also choose to create an online course. You can develop an online course addressing real estate related topics (preferably one that is not too competitive) and fill an underserved niche.
Video is the prevailing medium for these types of courses, although audio courses and courses with slides and other written materials also exist.
Once you have created the course, you can market it through various channels, such as you own website (if you have one), social media, and online course platforms such as Kajabi, Udemy, and Teachable.
8. YouTube
If you enjoy making videos, you can start a YouTube channel and earn passive income once you get enough traffic coming to your channel.
Like blogging, once you create the content, the passive income begins, but getting there can take a lot of work. It’s not easy to create a video and it takes time. And getting traffic to your channel can be difficult. You have to create interesting content, compelling titles, great thumbnails, and really understand how YouTube’s search algorithm works.
9. Rent Out Stuff You Already Own
There are a ton of ways to generate passive income from stuff you already own. What I like about this strategy is that you don’t
need any money to get started and you can keep it as low-key as you want.
This one’s pretty obvious, right? Everyone knows you can rent out extra rooms through Airbnb and collect some cash on the
side.
But you do have to be careful to make sure your activities are permitted by your local municipalities, your HOA (if you have one), your
landlord (if you are renting out your place), etc.
If you’ve got a spare bedroom or closet, or some extra space in your basement or garage, you can rent it out and generate passive
income each month.
Check out Neighbor, which is a leader in this space. I have used them myself – their platform is easy to use and you can get up and running in minutes. I participate in their “refer a friend” program, so if you sign up using this link, you (and I) will get a $50 Amazon gift card when you list your space.
If you want to learn more about this strategy, check out my article on the topic here.
Rent Our Your Cars Through Turo
You can also rent out your car when you are not using it on Turo. According to Turo, you can make hundreds of dollars a month doing this. Check out their Carculator to get a sense of how much you could make renting out your car through this platform.
If you want to learn more about this passive income strategy check out my article on the topic here.
Conclusion
So, there you have it: 9 great ways to generate passive income for real estate agents.
I get how important it is to keep your main business running smoothly and you certainly don’t want to lose sight of that, but I hope my passive income tips will get you started on the path to generating some hassle-free additional income that can improve your financial life.
If you want more great passive income ideas, check out my ultimate beginner’s guide to passive income [25+ strategies that work], where I cover tons of effective strategies that generate passive income.
If you are low on cash and can’t devote a lot of time or energy to your passive income portfolio, check out my article on 15 truly passive income strategies that require no money.
