Why You Can’t Make Money As A Real Estate Agent
If you’re looking to make a lot of money outside of a typical 9-5 you’ve probably thought being a real estate agent is a good option.
And at face value it is!
But there is so much more that goes into being a real estate agent then just closing deals between two parties and logging in with your password online checking out deals…
In fact, according to glass door and other job sites, real estate agents only make between $40k – $80k per year!
Why?
Well it’s crazy hard for real estate agents to get consistent buyers and sellers for one.
Some months they might sell 2-3 houses, other times they might get none…
It’s all very inconsistent.
But what is consistent?
The bills that you have to pay on time every month!
Being a realtor is pretty risky and cut throat.
According to Zillow, the average home costs $281,370. Sounds like a lot right? It is for everyone but the listing agent!
Realtors get 6% of a home sale, but really it’s actually 3% because that 6% is split between the two agents.
So what’s the profit on that?
$8,441.
Sounds pretty decent right? Well it only dwindles from there…
After your sale is completed you have to take a portion of that and give it to the company you’re working under.
But, let’s say that you work independently…then your struggle is going to be consistent clients since your brand hasn’t been around long.
Basically, if you’re going to become an agent, you will just have to accept the fact that it will be long hours and very inconsistent work with deals and prospects that constantly fall through.
Do you like the idea of real estate but want consistent cash in door?
Being A Landlord With A 24/7 Phone Number Sucks!
It’s 6am in the morning and you get the call…
“Hey man! My hot water is out! You better get your ass over here and fix it!”
Then you’re on the phone all morning with every other contractor in town trying to get prices and times of availability and coordinating with your tenant.
Trust us it’s not fun!
Liabilities With Real Estate
In real estate you have all sorts of liabilities. Anything and everything that breaks in the home is on you.
Roof repair? You.
Broken sump pump? You.
Pipes bursting? You.
Other Utilities? ALL YOU!
And let’s be real here, people think being a landlord is the best position to be in…
But that couldn’t be further from the truth.
When you sign a contract with a tenant, the expectation is that your charge of $1,000 or whatever of rent covers EVERYTHING and that they will have no more out of pocket costs.
That means YOU are out of pocket for anything that breaks…which directly impacts your cash flow.
That $1,000 you were hoping to collect as pocket money and passive income just became a lot less and more active.
Real estate gurus love to tell you that getting to $10k per month is easy…But that’s just simply not true. Especially when they recommend you guys buy the fixer uppers that are just money pits as your first rental properties.
Realistically your profit margins will be about 30%…
Yup, that’s how quickly the rent check dwindles. You better hope you have more than one property!
How does a business model with 90% profit margins sound…?
Bad Tenants
Another reason why real estate sucks is because of shitty tenants. And, no one wants to end up as a bad landlord story on social media.
Truth be told, not everyone is the ideal tenant like you are. If you know anyone involved in real estate just ask them about it.
They all have some tenant horror stories about crazy tenants, ones always late on payments, or ones that just trash the house.
It really sucks, and they can rack up expenses for you rather quickly!
Beyond that sometimes you don’t have a choice. Plenty of investors will tell you that they have chosen to have bad tenants over vacancies just because of the check.
At the end of the day owning real estate is pushed as the only type of passive income business model that can keep your bank account fat and happy, but that’s just not the case.
With all the liabilities, small profit margins, and being on the clock 24/7…real estate is just not worth it anymore.
Real Estate Post Covid-19
We won’t spend too much time talking about this, but let’s just say that things in the real estate market won’t quite ever be the same.
With covid came “rent moratoriums” and terrible interest rates.
Basically the government mandated that tenants did not have to pay their rent if they had lost their job / furloughed.
But guess what…
Nobody gave real estate investors mortgage breaks / moratoriums.
The bank waits on NO ONE.
As a result many people who did not already own their properties outright suffered greatly.
Rent moratoriums really set a precedent here. Anyone who doesn’t have the money in the bank to weather a storm like this really ought to stray away from real estate.
Which leads us to our next point…how much do you really need to invest?
How Much Do You REALLY Need To Invest?
Most real estate gurus selling a course online will tell you that you only $5,000 to get started and buy your first property.
However, that’s pretty much a needle in a haystack.
You see IF, and it’s a big IF, you can find a property to buy with $5,000 odds are it’s going to have lots of problems and you’re probably not going to be able to charge $1,000 per month for it.
Also, let’s revisit this as well…
You’re not going to be able to create wealth and live financially free by owning just one property.
Realistically, you’re going to need at least 10 properties to be able to quit your job and to pick up 10 properties like that, you’ll need anywhere from $50,000-$100,000 cash and that’s on the low end…
If you can’t afford all that, and let’s be real who can?…check out this much more FINANCIALLY REALISTIC model!
THE REAL PROFIT MARGINS OF REAL ESTATE
The average rent payment in the US is $1,000 per month.
As a prospective real estate investor…that looks like an awesome and scalable number.
However, that’s the number you see before all your expenses are taken into account.
Here is a list of the most common expenses you will incur in rental real estate:
- Property taxes
- Maintenance
- Insurance
- Utilities
- Property management
Now these aren’t ALL the expenses you will incur, but they are the ones you can set your clock by.
Let’s price them all out.
Property taxes tend to roughly 10% of the monthly rent value of the home, and they tend to rise each year.
Maintenance costs vary, but it’s a safe bet to reserve 25% of the rent each month in case something breaks. Because we all know…homes are the most expensive fixes.
Insurance is also roughly another 10% each month.
Utilities are just over 10%.
Property management fees vary but the average is still another 10%.
With some quick little math you’ll find that AT MINIMUM 65% of your check immediately leaves you hands!
So out of $1,000 the best case scenario is that you walk away with $450 for the month…
Sure things could be worse, but often times things don’t go according to plan.
Maintenance could absolutely kill you one month and you’d be in the red on that property for months on end!
So at best you’ll see a 45% profit margin and more realistically average 20-30% when all is said and done.
That means that you’d have to own 10 different properties just to see $2,000-$3,000 of passive income each month…
But who the hell has $300,000 cash only to get $3,000 each month? That doesn’t sound like good english to us!
It’d take nearly 10 years for you to break even!
Surely there’s a better way to make money without having to front $300k cash…
Our Top Recommendation For Making Money Online In 2024
Our review team has come across a program in the real estate industry that is next level!
Although it’s not real estate in the traditional sense, it’s all digital.
Where Real Estate falls short is in scalability. Because in order to make a good amount of money with real estate, you have to have several different properties.
And who has the capital for that right away?
But what if you went local?
With Local Digital Leasing, you will be getting service requests from multiple sites at every minute of the day from people who are willing to pay a lot of money for what you can provide them.
I was watching a YouTube video once where the host made a comment that it isn’t about making a lot of money from one property… it’s about making a little bit of money from lots of different properties.
So, think of it this way….
What if you could have streams of investment income where you operated 10 rental units that you could charge anywhere from $750-1,000 per month?
That’s $7,500-10,000 per month in passive income!
What If You Invested Into 100 Rental Units?
But instead of spending $Millions to build houses or apartment complexes… you spend a couple hundred dollars to build websites.
You then get those websites ranked in the search engines for specific home-based services that customers are searching for.
Next, you offer your lead generation system to local business owners who are looking for customers and are willing to pay you for their information.
And Then…
BAM!
You’ve just created a Digital Leasing Investment Empire that is potentially earning you 4-5 figures in PASSIVE INCOME on a monthly basis without spending a single dime on ads.
With conventional Digital Leasing, you have to compete with thousands, if not millions of others who are selling the SAME product to the SAME customers.
Once the training program is completed you will also have access to a Facebook group much better than any Real Estate group in our opinion. This group is much more active.
Unlike Real Estate, where you’re profiting maybe $9,000 per property per year (before expenses), you could be getting 5-10X THAT.
With Local Lead Generation, the competition is virtually nothing and your profit margins are 85-90%… and it’s RESIDUAL!!!
That means you’re making money month after month whether you go into the office or not…
Whether you show a house to a friend or not…
Now, I could go on and on, but I’m sure you have tons of questions about how to create Digital Leasing assets and start building YOUR digital empire!
