What Is the Housing Market Cycle?

The real estate cycle is the natural process of growing, expanding, and receding in the real estate market. It’s generally divided into four stages: recovery, expansion, hyper-supply, and recession. Each cycle phase is unique and impacts the real estate market differently, like price, vacancies, and inventory.

People generally estimate that the real estate market cycle takes an average of between 10-18 years. However, this can change pretty drastically depending on some of the factors that affect the market. Many different things affect the natural flow of real estate cycles, like the following:

• Interest rates
• Economic health
• Demographics
• Government policies
• Real estate development
• Business growth
• Employment rates

Use this real estate cycle chart to help identify the state of the market (we’ll use this chart throughout the article to show the various stages):

Why Investors Need to Understand the Cycle

If you want to be a successful real estate investor, you need to understand the market beyond a real estate cycle chart. Investing is a long-term strategy, and it’s easy to make poor decisions if you don’t understand how the market naturally ebbs and flows. Understanding the real estate market cycles will help you to do the following:

• Know when the optimal times are to buy and sell
• Adjust your pricing strategies for buying and selling based on the state of the market, demand, and pricing changes
• Generate a higher profit because you have a long-term perspective
• Avoid poor investments by making choices before the market makes a downturn

Understanding the housing market cycle is essential to make profitable investments. Learn how to plan even more effectively in our guide to making a real estate investment business plan.

Stages of the Housing Market Cycle

At any point, many factors affect the real estate market. However, every change in the market can fit into one of four stages of the real estate cycle: recovery, expansion, hypersupply, and recession.

1. Recovery

The first part of the real estate cycle is right after a recession when the market is trying to recover. At the beginning of the recovery phase, people still feel the effects of the recession. There is typically an excess supply of properties that doesn’t match a decline in demand. This phenomenon creates a drop in the prices of rent and properties.

What investors should do during recovery:

• Purchase below-market properties (best to do in the early stages of recovery)
• Sell renovated properties that were purchased during a recession
• Negotiate property prices to get undervalued properties or the best value for your flipped homes

2. Expansion

As recovery continues, some call parts of this phase “the honeymoon.” This is when the general economy is growing, employment rates are starting to improve, and demand for real estate is increasing. You’ll see signs of the expansion phase when properties sell more quickly, rent prices are starting to increase, and there is a higher competition for bank foreclosures. This is the part of the real estate cycle when supply and demand are the most balanced.

What investors should do during expansion:

• Research growing areas to invest in locations that are in high demand
• Renovate or develop properties (high demand justifies the cost)

3. Hypersupply

The next part of the housing market cycle is when the pendulum swings a little too far in the opposite direction, and now the supply of real estate exceeds the demand for it. This can be caused by overbuilding during the expansion phase. Watch for this part of the real estate market cycle by looking for low unemployment rates, quickly selling properties, and increases in property and rent prices.

It’s common for some investors to panic when they find themselves in this spot on the housing market cycle graph because they know a recession is coming. You can always liquidate your assets, but it’s often a wise strategy to hold properties and generate short-term cash flow. However, it’s smart to prepare for an upcoming recession by adjusting your pricing strategy.

What investors should do during hypersupply:

• Hold properties and let them appreciate
• Focus on generating short-term cash flow
• Prepare for upcoming recession

4. Recession

Of all the real estate market cycles, the recession stage is the most daunting for investors. At this point, there is an overabundance of inventory that surpasses demand. This means there are more vacancies, and prices start to fall again. During this stage, job growth slows down, leaving fewer buyers and renters to fill your rentals. At the same time, home values increase more quickly. Even though recessions are typically challenging for rental property owners, slow periods of the economy are the best time to invest in real estate.

What investors should do during a recession:

• Buy distressed, undervalued properties with high long-term potential
• Look for distressed properties or those in foreclosure
• Develop a long-term rental or flip strategy for investments

Frequently Asked Questions (FAQs)

What are the four cycles of real estate?

How long is the housing market cycle?

What phase of the real estate cycle are we in in 2024?

Bringing It All Together

Understanding the real estate market cycle can be overwhelming at first, but it’s an extremely important concept to master for aspiring real estate investors. Make sure to understand the ins and outs of each part of the cycle and learn how to recognize shifts in the housing market cycle to make the best decisions for your business.

The post How Smart Investors Decipher & Respond to Real Estate Market Cycles appeared first on The Close.

• Kiavi: Best for rapid financing for quick property flips
• RCN Capital: Best for investors requiring large loan amounts 
• Lima One Capital: Best for loan products for every type of investment strategy 
• Groundfloor: Best for new investors with crowdsourced loan opportunities
• The Investor’s Edge: Best for personalized investment strategies through one-on-one consultations
• New Silver: Best for tech-savvy investors seeking fast, data-driven loan approvals

Type of Software	Best for	Available markets	Learn More
	Obtaining quick financing for your projects	32 states plus Washington, D.C.	Kiavi ↓
	Investors needing large loan amounts	All states except AK, NV, ND, SD, and VT	RCN Capital ↓
	Loan products for every type of investment strategy	46 states plus Washington, D.C.	Lima One Capital ↓
	New investors with crowdsourced loan opportunities	Nationwide	Groundfloor ↓
	Investors that need 1-on-1 assistance with their projects	39 states	The Investor’s Edge ↓
	Investors needing instant loan approvals	39 states	New Silver ↓

Type of Software	Best for	Available markets	Learn More
	Obtaining quick financing for your projects	32 states plus Washington, D.C.	Kiavi ↓
	Investors needing large loan amounts	All states except AK, NV, ND, SD, and VT	RCN Capital ↓
	Loan products for every type of investment strategy	46 states plus Washington, D.C.	Lima One Capital ↓
	New investors with crowdsourced loan opportunities	Nationwide	Groundfloor ↓
	Investors that need 1-on-1 assistance with their projects	39 states	The Investor’s Edge ↓
	Investors needing instant loan approvals	39 states	New Silver ↓

Kiavi: Best for Rapid Financing for Quick Property Flips

Pros Has no application fees Can close in as little as 7 days Offers experienced customer support Lends to business entities	Kiavi Rates & Terms Interest rate: 9.25% to 12% interest only Loan-to-value ratio (LTV): 95% LTC (loan-to-cost), up to 100% of rehab costs, 80% ARV (after-repair value) Upfront fees: No upfront fees; 2% to 3% origination fee Term: 12 to 24 months Credit requirement: 650 FICO score, no hard credit pull Min and max loan amount: $75,000 to $3 million Prepayment penalty: Yes Property types: Single-family homes, attached and detached planned unit developments (PUDs), and 2-4 unit rentals
Cons Is not available in all states Requires appraisal for rental loans Cannot get long-term financing as a prepayment penalty

Why I Chose Kiavi 

I chose Kiavi as one of the best hard money lenders for rapid financing for quick property flips because of their efficient loan processing. They specifically offer fix and flip loans with rates as low as 9.25%. Because of their swift financing process, inventors can compete with all-cash buyers on new purchases. Their application process bypasses tedious paperwork like pay stubs and W-2s, as their technology can cut through the clutter and get you approved quickly.

Additional Features

• Prequalification: With just a soft credit pull, real estate investors can prepare to make quick offers on any opportunities that arise. 
• Flexible loan amounts: With loans up to $3 million, Kiavi can accommodate small renovations and large-scale projects.

RCN Capital: Best for Investors Requiring Large Loan Amounts

Pros Can close in as little as 10 days Has in-house loan approvals Has dedicated customer service Has funding for new construction projects	RCN Capital Rates & Terms Interest rate: 9.99%% to 12%, interest only; varying based on investing experience Loan-to-value ratio: Up to 90% of the purchase price, 100% of renovation cost (not to exceed 75% of ARV) Term: 12 to 18 months Upfront fees: No upfront fees. 1% to 5% origination fee Credit requirement: 660 minimum credit score Maximum loan amount: $2 million generally, up to $2.5 million for properties with 5+ units Prepayment penalty: None Property types: Condo, townhouse, single-family, duplex, multiunit, mixed-use; not for owner-occupied properties
Cons Has no nationwide coverage Requires appraisal for all loans Has a minimum loan amount that may be high for new investors Has no funding for owner-occupied residential properties

Why I Chose RCN Capital

I selected RCN Capital because it’s one of the hard money lenders for real estate that offers loans up to $2.5 million. This amount is significantly higher than many other hard money loan lenders, making it ideal for investors handling large-scale developments or multiple rental properties. RCN determines the maximum loan value based on the loan program and the value of the real estate asset as collateral. Unlike more tech-forward lenders, RCN requires a typical application process to include credit reports, background checks, bank statements, property appraisals, etc.

Additional Features

• Rehab budget builder: This tool is available to help investors analyze their investments to understand cost, risk, ROI, etc.
• Video Library: It includes up-to-date videos that offer market updates, investment tips, and motivational content.

Lima One Capital: Best for Loan Products for Every Type of Investment Strategy

Pros Has clearly outlined loan terms Approves loan in under ten days Has a simple renewal process once approved Has an established investor referral program	Lima One Capital Rates & Terms Interest rate: 9.6% to 12% interest only Loan-to-value ratio: 92.5% of LTC, 75% ARV Term: 13 to 24 months Upfront fees: 1% to 2.25% of the loan amount Credit requirement: 620 minimum credit score, 660 for inexperienced borrowers, options for nonrecourse and soft credit pulls available Maximum loan amount: $3 million Prepayment penalty: None Property types: Townhouse, single-family, multiunit up to 4; not for owner-occupied properties
Cons Has limited coverage in certain states Might require personal guarantees Requires high credit scores for some programs May not be a good option for new investors

Why I Chose Lima One Capital

Lima One Capital’s extensive range of loan products makes it the best hard money lender for supporting every type of investment strategy. Even within each loan product, like fix and flip loans, there are multiple financing options for flipping, fix-to-rent, and bridge loans. They also provide loans for rentals, new construction, multifamily properties, and short-term rentals. In addition, they offer investors a variety of loan terms and structure options like loans from 13-24 months, nonrecourse, single loans, and portfolios. Best of all, investors only have to pay interest on what they draw and not on unused funds.

Additional Features

• Case studies: Detailed case studies on their website illustrate the strategies, financial figures, challenges, and outcomes of real-world property investments.
• Podcast: A podcast covers various topics relevant to real estate investing and provides ongoing education and industry insights in an easily accessible audio format.

Groundfloor: Best for New Investors With Crowdsourced Loan Opportunities

Pros Has no hard credit pulls Has deferred payments available Has minimum loan amount of $50,000 Has no minimum transaction experience	Groundfloor Rates & Terms Interest rate: Starting at 7.5% Loan-to-value ratio: 80% to 100% of LTC, 70% of ARV Upfront fees: $495 evaluation fee, 2.75% to 4% origination fee (can be financed), $1,200 doc prep fee Credit requirement: 650 minimum credit score Maximum loan amount: $75,000 to $750,000 Prepayment penalty: None after three months Property types: New construction, condo, townhome, single-family, multiunits up to four
Cons Requires a higher minimum credit score Has a minimum interest requirement for prepayment Has a longer application closing timeline Has high closing fees

Why I Chose Groundfloor

Groundfloor is ideal for new investors because of the lack of transaction experience required. They are one of the national hard money lenders that allows investors to start with smaller amounts and gain experience in real estate financing. The trade-off for a lack of investor experience is that Groundfloor will require a higher credit score. They provide a comprehensive education hub for investors to access videos on growing wealth and budgeting their finances. I also found that their crowdfunding investment options offer a great opportunity for new investors to invest in real estate without taking on the purchasing burden.

Additional Features

• Blog: A regularly updated blog provides insights, updates, and educational content related to real estate investing and personal finance.
• Debt service coverage ratio (DSCR) loans: Long-term loans are available based on cash flow generated by the property instead of loan approvals based on the investor’s income. 

The Investor’s Edge: Best for Personalized Investment Strategies through 1:1 Consultations

Pros Has 100% funding options available Is ideal for new investors Offers free lending consultation Has available funding for multiple properties	The Investor’s Edge Rates & Terms Interest rate: 12% to 18% interest only, with the option to roll monthly interest payments into the final payoff statement. Loan-to-value ratio: 80 to 100% of LTC, 75% of ARV Upfront fees: $495 evaluation fee, 3% to 5% origination fee (can be financed), $1,200 doc prep fee Credit requirement: No minimum credit score Maximum loan amount: $250,000 for 100% loans, $1 million for all others Prepayment penalty: None Property types: New construction, condo, townhome, single-family, multiunits up to 4
Cons Has higher interest rates compared with competitors’ Can take up to 12 days to approve loans Has website information that can be overwhelming to new investors Does not clearly list loan details

Why I Chose The Investor’s Edge

I am a fan of The Investor’s Edge as the best for personalized investment strategies due to their focus on partnering with investors and their projects. They offer free one-on-one consultations to help investors identify which investment strategies will help them reach their financial goals. Beyond the consultations, the team at The Investor’s Edge team will help investors identify, fund, and sell their properties. I also appreciate the availability of informative courses tailored to home and land flipping for new investors.

Additional Features

• Gap financing: It is a type of short-term loan available to investors that covers the difference between the total funding needed for a project and the principal amount already secured. 
• The Investor’s Edge Software: It is a comprehensive tool designed for investors to efficiently perform real estate market analysis, property valuation, and investment strategy planning. 

New Silver: Best for Tech-savvy Investors Seeking Fast, Data-driven Loan Approvals

Pros Provides instant proof of funds documents Has no hard credit pulls Offers repeat borrower discounts Offers immediate online approval	New Silver Rates & Terms Interest rate: 10% to 12.75% interest only Loan-to-value ratio: 90% of LTC, 80% of ARV Term: Up to 24 months Upfront fees: 1.875% to 3% origination fee ($3,500 minimum, can be financed), $759 underwriting fee, $1,250 legal fee, $350 doc prep fee Credit requirement: 650 minimum credit score; no hard credit pull Maximum loan amount: $100,000 to $5 million Prepayment penalty: None Property types: Residential 1 to 12 units, including single-family, condo, and townhomes; multifamily up to 50 units
Cons Has fees for appraisals Has no closing cost credits Limits the maximum size to 5 acres for fix and flip loans Only offers loans for residential properties with 1 to 50 units

Why I Chose New Silver

New Silver is one of the hard money loan lenders ideal for tech-savvy investors because of its efficient, AI-driven loan approval processes. Investors can get instant online approval in just five minutes and close in as little as five days. Loans secured through real estate collateral only require a soft credit pull in addition to the property’s value. They do not need income verification for loan approval. I appreciate the platform’s focus on streamlining the lending process, which minimizes paperwork and accelerates the timeline from application to funding.

Additional Features

• Advantage program: It has enhanced loan terms and rates to repeat borrowers who have successfully completed previous projects with New Silver. 
• Fintech scholarship: It has an initiative to support students pursuing studies in financial technology-related fields. 

What Is a Hard Money Lender? 

Hard money lending companies provide specialized financing where real estate property is pledged as collateral. They are much different from a traditional lender, such as a bank, which first and foremost bases its decisions on a borrower’s credit history and income when deciding whether to approve a loan. 

Hard money lenders focus primarily on the property’s value and potential. This focus on asset value, not creditworthiness, makes hard money loan lenders quite applicable in real estate ventures where time is of the essence to maximize new investment opportunities. 

Pros & Cons of Hard Money Loans 

Hard money loans are one of the most popular financing options for real estate investors because they provide quick turnaround on projects where traditional funding may not be possible. The table below identifies all the pros and cons related to hard money loans that investors should be aware of when considering this financing option:

How to Know if You Need a Hard Money Lender

Knowing whether a hard money lender is the proper fit for your real estate financing involves many considerations. Most hard money loans are designed for unique situations or circumstances that traditional funding just can’t handle. The following is a closer look at situations where you should consider a hard money lender:

• Quick funds are needed: You require quick financing to secure a real estate deal before potential competitors.
• Credit issues: Traditional financing isn’t an option due to credit issues or unconventional income that doesn’t satisfy typical bank requirements.
• Short-term financing: For projects like fix-and-flips or bridge loans, you need short-term financing.
• Investment opportunities: You encounter a real estate investment opportunity that requires immediate action that conventional funding sources cannot meet.
• Renovation projects: You need financing for purchasing properties that require significant repairs that traditional banks may not finance because of their condition.

How to Choose the Best Hard Money Lenders

The right lender can make or break your investment. Keeping these factors in mind will put you in a better position to know when you really need a hard money lender and how to be sure you are selecting an appropriate one for your specific financial and project goals. This evaluation allows you to work with the best lender possible for the most optimal terms possible for your investment strategy. Here is how to choose the right hard money lender:

1. Evaluate lender reputation: Research the lender’s track record, customer reviews, and industry reputation to ensure they are reliable and fair.
2. Understand the terms: Fully comprehend all loan terms, including interest rates, fees, loan-to-value ratio, and repayment schedule.
3. Assess the speed of funding: Since time is often critical, assess how quickly the lender can process and fund the loan.
4. Professional advice: Consider consulting with a financial advisor or real estate professional to help navigate the process and select the best lender for your specific needs.
5. Compare multiple offers: Don’t settle for the first lender you meet. Compare different offers to find the best terms and rates.
6. Check for transparency: Ensure the lender is transparent about all costs, fees, and any penalties associated with the loans. 

Methodology: How I Chose the Best Hard Money Lenders 

To find the best hard money lenders of 2024, I devised a rigorous methodology focused on the most critical factors to create an unbiased review. I reviewed various lenders against multiple key factors to ensure I viewed them through the lens of what would be most important to a real estate investor. The detailed analysis then isolated lenders that support good, solid financial solutions and blend well with various investment strategies and goals. 

Here are the key factors considered:

• Interest rates and loan terms: Assessed the competitiveness and flexibility of each lender’s offerings.
• Speed of loan processing and funding: Evaluated how quickly each lender processes and disburses funds, a crucial factor for time-sensitive investments.
• Lender reputation: Examined customer reviews and industry feedback to gauge each lender’s reliability and overall customer satisfaction
• Transparency: Focused on how openly each lender communicates fee structures and loan conditions, ensuring no hidden costs exist.
• Geographical coverage: Considered the availability of services across different regions to accommodate investors in various locations
• Target audience suitability: Analyzed which types of real estate investors (e.g., fix-and-flippers, buy-and-hold investors, and commercial developers) each lender best caters to based on their product offerings and specialty areas

Frequently Asked Questions (FAQs)

What are the typical interest rates for hard money loans?

How quickly can I receive funding from a hard money loan?

What are the typical financing terms of a hard money loan?

Your Take

Investors should look for the best hard money loans that fit the needs of your project and financial goals. Consider a lender that offers flexible terms of the deal, transparent structures of the fees charged to the investor, and competitive rates of interest. Additionally, the lender should have an impressive, reputable status in the industry, characterized by positive testimonials from clients, with reliable transactions that give value to the money. The right hard money lender will do more than just finance an investment. They will also support the investor’s overall strategy and want to contribute to their success.

The post The Best Hard Money Lenders of 2024 (Interest Rates, Fees & More) appeared first on The Close.

1. Expired Listing Prospecting Letter

Expired listings can be an excellent source of real estate leads, as these homeowners already want to sell. Most often, the main reason a home doesn’t sell is pricing. The owners might not have listened to their listing agent when they recommended a lower price, or—even better for you—maybe their listing agent wasn’t confident enough to price it correctly in the first place. 

The trick to writing real estate letters to potential sellers that persuade these owners to relist their homes is simple. Empathize with their problem and offer a fresh solution to fix it. In this letter, the perspective is shifted away from blame and focuses on a simple, tech-savvy solution:

copy to clipboard

Dear {first name}:

As a Realtor of {#} years in the {your farm area} community, I was surprised to see that your home did not sell. It has {a unique feature of the home} and {a desirable feature of the home} that many {your farm area} buyers who call our office are looking for. In fact, I sold {local comp you sold} to a couple relocating from {city} recently for well above asking. They were in love with the neighborhood, and after my presentation, they also fell in love with the home.

So why did this home sell over asking while yours didn’t? Simple. Most buyers have a hard time imagining themselves living in any new home. Sometimes, we need to nudge them by showing them exactly what a home could look like once renovated.

This is actually a lot easier and more affordable than it sounds. Using state-of-the-art virtual staging tools, my team creates realistic renderings of what your home would look like renovated and decorated to house hunters’ tastes. When buyers see the renderings, their faces light up, and they see the potential in your home.

I would love 10 minutes to show you some of the creative virtual staging and renderings I’ve used to sell other homes in your neighborhood to see if they might work to sell your house for over asking, too.

Text me at the number below to set up a time for a quick, no-pressure Zoom call. I think you’ll be pleasantly surprised with the results.

Sincerely,
{your name}
{your cell phone number}
{your website}

2. FSBO Letter

Inevitably, you’ll meet homeowners who say they want to sell on their own. Savvy agents like you understand that these sellers simply want to save money. They don’t truly fathom how much work goes into marketing a home. Your approach to FSBO owners must demonstrate the value you bring to a real estate transaction. Use one of our best FSBO scripts to master the conversation. Offering free, actionable, hard-won advice on marketing their homes is an excellent way to persuade an FSBO that you are there to help, not sell. And it’s a great way to get a foot in the door and build trust. Here’s a good example:

copy to clipboard

Dear {first name},

I wanted to congratulate you on your success so far in listing your home on your own. Marketing homes is not easy, and I love how you {something they’re doing right with their listing, such as persuasive copy or nice pictures}. That’s something that some agents skimp on, so kudos for doing a great job with it.

That said, your {something they are doing poorly} can use some work, and I wanted to offer some quick and free advice on improving it.

First, you need to {actionable way to improve}, which you can do by {specific way to do it}. If you decide to take my advice, I would love to know how it works out.

Of course, as you may be discovering, selling a home is a lot of work, and the trial and error involved can mean a slower sale or even selling for a lower price. I can help you save time and money on that trial and error, and since I have {#} years of experience selling homes in {your farm area}, I’m confident that the price of my commission will be covered by the higher price I can get for your home.

If you’d like to discuss how I can sell your home faster and for a better price, please text me on my cell below.

Sincerely,
{your name}
{your cell phone number}
{your website}

3. FRBO Market Research Letter

Not all sellers are created equal. You’ll eventually encounter rental property owners using one or more real estate investment strategies. They look at their property differently than someone who lives in their home; they want to maximize the money they can make from their real estate investment. When you talk with one of these investors, you’ll want to get straight to the point and speak their language. That means telling them immediately that you can get them a better return on their investment than they are now.

copy to clipboard

Dear {landlord’s name},

I just came across your rental listing at {address of FRBO} and wanted to let you know that you could easily double or triple your investment tomorrow by putting your property on the market.

Even in this market, my research shows that {type of property} homes like yours have increased more than {percentage} in the last five years. However, trends indicate a slowdown on the horizon due to new developments and regulations that may kill investment values.

If you have a few minutes for a coffee sometime this week, I’d love to show you my research in detail. You might be surprised at what your {type of property} is worth in today’s market. Or, if you prefer, text me at my cell phone number below and I can send you a free PDF with my analysis.

Best regards,
{your name}
{your cell phone number}
{your website}

4. Absentee Owner Letter

The struggle for property owners who don’t live in the area is real. It’s not uncommon for a homeowner to move before they can sell or inherit a property in another area they don’t live in. These unexpected landlords practically have to hire someone to manage their rental on their behalf. But you can offer a solution to their long-distance rental woes.

copy to clipboard

Dear {landlord’s name},

As you undoubtedly know, owning property that is far away from you can be challenging. Problems tend to become magnified by distance and often lead to anxiety and frustration.

Despite current market conditions, my brokerage is selling property at a brisk pace. I believe that we can sell your {type of home} in {your market community} at an attractive price.

In fact, we would be happy to prepare a comparative market analysis to show you what you might expect to receive from a sale in the present market without obligation to you. Text or call me at my cell phone below if you would like more information about what we can do for you.

Sincerely,
{your name}
{your cell phone number}
{your website}

5. New Agent Announcement Letter

There are so many different real estate prospecting approaches, especially when you’re just starting out. Announcing your new career as a real estate agent to friends and family on Facebook is a great way to build your sphere of influence. The problem is that your post is too easy to ignore. On the other hand, a heartfelt real estate farming letter isn’t. Most people in your sphere will be impressed that you actually took the time and effort to send a letter. That alone makes it worth it.

Real estate coach Sean Moudry’s sphere letter below is an excellent example of a real estate farming letter. Hit your strengths as a new agent, and remind them they have you as an insider in the real estate industry.

copy to clipboard

Dear {name},

If you’re anything like me, chances are you’re only reading this letter out of sheer curiosity. After all, why would someone go through the trouble of writing a letter in {year}? What could possibly be so important that Facebook, Instagram, email, texting, and LinkedIn just aren’t good enough?

Why did I go the extra mile here? Simple. Big changes lead to big opportunities. Let’s start with the changes: Last month, after {years} in {previous industry}, I proudly joined {your brokerage or team}, one of the most respected and talented {brokerages or teams} in {your farm area}.

Now for the opportunities. Here are some of the potential benefits of having a personal real estate insider in {your farm area} that you might not have thought of:

Integrity: I will answer any real estate questions you have with complete transparency and honesty.

Access: I can hunt down information on any property you’re curious about whenever you need it.

Accountability: Since we are personally connected, I have a financial and social obligation to work harder for you than any other agent in {your farm area}. But I don’t want you to hire me just because we are personally connected. I plan to earn your business.

If you have a few minutes this week, I would love to buy you a cup of coffee at {local coffee shop} to talk about the market and how I can help you achieve your real estate goals this quarter, this year, and for many years to come.

Sincerely,
{your name}
{your cell phone number}
{your website}

6. Referral Request

Referrals are a real estate agent’s honeypot and typically provide the largest pool of prospects they can tap into. When you reach out to your sphere of influence, you connect with people who already know, like and trust you, so you don’t have to spend time convincing them how awesome you are. Reach out directly and ask them if they know anyone who might need your services. It’s also a great way to remind them you’re their friendly neighborhood real estate pro.

copy to clipboard

Hi {name},

I hope this letter finds you well. Can you believe how fast time is flying by? It feels like just yesterday we {shared memory or event, like closing on their home}.

I’ve been up to some exciting things in the real estate world, helping people find their dream homes and make wise real estate investments. It got me thinking—who do I know who might be looking to make a move or invest in property? And, of course, you came to mind.

I’m not asking you to pack up and move (unless you secretly want to), but if you happen to know anyone—friends, family, co-workers, or even your neighbor—who’s thinking about buying or selling real estate, I’d be super grateful for the heads up.

Word of mouth is powerful in this business, and I know that if you recommend someone, they must be amazing. If there’s anyone you think could benefit from my real estate prowess, just drop me a line. A simple “Hey, my friend might be interested—I’ll connect you guys!” would be pure gold.

And, of course, if you ever want to chat about real estate, life, or anything in between, my door (or phone) is always open. Catching up would be fantastic. I’ll buy the coffee!

Thanks for being awesome, {friend’s name}. Looking forward to hearing from you soon!

Warm regards,

{your name}
{your cell number}
{your website}

7. Local Business Prospecting Letter

Entrepreneurs and businesses can become great allies in your community. Show entrepreneurs that you’re a valuable asset by aligning your services with their business objectives. Engage with genuine curiosity about their businesses and a willingness to provide meaningful support. Focus on building long-term symbiotic relationships rather than seeking transactional opportunities.

copy to clipboard

Hey {business owner’s name},

I just wanted to let you know that my team and I are thoroughly impressed with how your company has grown and become such an essential fixture in {your community}. Building a brand that people actually care about isn’t easy, and {your farm area} wouldn’t be as fun without {their business name}.

That’s why I’m reaching out today. My brand has been working on creating engaging experiences for prospective homeowners at open houses. I am averaging {approximate number of attendees} people per open house.

All of them are interested in buying a home in {your farm}, and a warm welcome with your {their product or service} would be an excellent way to introduce them to the community. Adding your services would be an excellent way to welcome our open house guests and allow you to show off your {product they sell}.

What day this week works for a quick call—or better yet, a meeting over coffee at {local coffee house}?

Best regards,
{your name}
{your title}
{your cell phone number}
{your social media and website links}

8. Divorce Prospecting Letter

Since transactions after a divorce are often stressful, they may not be the best choice for newer agents. The sellers in divorce transactions will register high on the emotional scale and will take a lot of patience and grace to complete. The truth is they need someone to get them through the process, but the key players in this situation will require a delicate, empathetic, diplomatic approach. If you’re an experienced agent ready for the challenge, here is a letter you can use to get divorce leads.

copy to clipboard

Dear {name},

Buying or selling a home in {your local market} is hard. Add in the stress and confusion of a divorce, and it becomes 10 times harder. Hire a real estate agent who has never worked with clients who are getting divorced before, and it becomes 20 times harder. The good news is that it doesn’t have to be.

Throughout my {#} years working as an agent in {your farm area}, I have helped many clients smoothly navigate the tricky process of buying and selling homes after a divorce. Many of them have said that after their families, friends, and attorneys, they valued my help most of all. I’ve included {#} testimonials from former clients at the end of this letter.

My {#} years of experience can help de-stress buying or selling after a divorce. Here are a few things I’ve learned over the years to help close real estate transactions after a divorce with as little stress as possible:

• Experience matters: New agents are often so hungry to close a deal that they fail to guide you through the process smoothly. They usually end up adding stress when they should be helping to reduce it. With {#} years in real estate, I have the experience you need.
• Integrity matters: Since you likely need to buy or sell quickly, many agents will rush you through the process—again, adding stress when they should be helping to reduce it.
• Skills and empathy matter: While many agents just offer empathy, I offer something far more valuable: the marketing, sales, and negotiation skills to de-stress your transaction as much as humanly possible.

If you would like to talk over your options for buying and selling real estate or just need some quick advice, you can text me 24/7 at {your cell phone number}.

Sincerely,
{your name and title}
{your cell phone number}
{your website}
{testimonials from former divorce clients}

9. Probate Prospecting Letter

Like divorce transactions, probate listings come with so much stress and red tape that we generally don’t recommend them for new agents. While it’s true that probate listings tend to sell quickly, dealing with grieving families and lawyers takes patience and a few years of experience. If you’ve done your homework and feel ready to take on the challenge, here is a letter offering empathy and showing off your agent skills.

copy to clipboard

Dear Mr./Mrs./Ms. {last name},

I am writing to you to offer my condolences for your recent loss. I did not know {decedent’s name} personally, but having been through this myself, I know how surreal and stressful it can be to navigate the labyrinth of lawyers, paperwork, and red tape accompanying the grieving process.

I know it’s a small consolation, but I would like to help you alleviate some or all of that stress so you can focus on remembering {decedent’s name}. I have been an active Realtor in {your farm area} for {# } years. As you can see from the testimonials attached to this letter, I have extensive experience selling homes quickly, and without the stress of hard-sell negotiating with deal-hungry investors or endless open houses that most Realtors use to find clients for themselves rather than to sell your home.

My promise to you is that I will never waste your time, and will only act in your best interests—always. If you would like to talk about next steps, please don’t hesitate to send me a text or call me on my cell below.

Sincerely,
{your name and title}
{your cell phone number}
{your website}
{testimonials from former probate clients}

10. Preforeclosure Prospecting Letter

Preforeclosure letters are not easy to write. But in a challenging situation, your letter and services just might help someone out of a tricky financial crisis when they most need it. The key to converting these leads is empathizing with their situation and remaining optimistic and realistic. Here is a sample letter you can use:

copy to clipboard

Dear {first name},

I know you’re probably tired of getting letters in the mail about your home, but I am writing to offer you something most are not: hope. I won’t insult you and pretend this situation is easy, or that I have the perfect solution to save your home. Instead, I am offering two simple things: empathy and options.

Empathy: I know this might not sound sincere from someone you don’t know yet, but I have helped many people in your exact situation get through this process with the least amount of stress possible. I will be your advocate, both legally and as a person with sensitivity and experience.

Options: There are many ways to get through this process quickly and with the least amount of pain. A short sale—which will allow you to avoid foreclosure and rebuild your credit faster—is an option that many of my former clients chose as the best solution. I have extensive experience with the short-sale process and can be a staunch advocate for your best interests. But I’m happy to walk you through other choices if you’re interested.

If you have five minutes and an open mind, please call or text me at my cell number below to chat. I know it might not seem like it now, but this too shall pass. Hopefully, I can make it easier for you.

Sincerely,
{your name and title}
{your cell phone number}
{your website}

11. Open House Follow-up Prospecting Letter

Obviously, you want to circle prospect before an open house. But if you want to make a more personal connection with your open house guests, a quick letter—or better yet, a handwritten card—will have an excellent return on investment. Just remember to keep it light, short, and friendly. Here is an example of a real estate letter you can use for inspiration:

copy to clipboard

Dear {first name},

I just wanted to send you a quick note to personally thank you for coming to my open house at {open house address}. It is always a pleasure to meet new people in {your farm area}. I am passionate about serving {your farm area} and I genuinely believe that even small connections at events like my open house build stronger communities. Chocolate chip cookies certainly help!

If you ever need advice about this crazy real estate market or just want to grab a coffee sometime, please don’t hesitate to call or text me at my cell number below.

Best wishes,
{your name and title}
{your cell phone number}
{your website}

Prospecting Letter Templates

Like what you saw in this article? Download our PDF of 24 letter templates, including the 11 I share in this article, and get ready to boost your lead gen.

7 Tips to Write Real Estate Prospecting Letters

As you can tell from the wide variety of prospecting letter samples above, there are as many ways to write a prospecting letter as there are agents in your area. Drawing from my years of experience in copywriting, I spent years warming up leads and reaching out to prospects with real estate letters. To help you craft your unique prospecting letter templates, I’ve compiled this list of best practices designed to improve your response rate.

Copywriting is all about being persuasive and encouraging your readers to take action. The right words can make the difference between a letter that generates leads and one that ends up in the trash. Keep these key points in mind when crafting your prospecting letters:

Tip 1. Make it personal

Personalize your letter. Use the recipient’s name and adopt a friendly tone. Make your greeting feel warm, like you’re writing a letter to a friend.

Example: Hi, John!

Tip 2. Grab attention

Try using an attention-grabbing lede in your opening paragraph. The goal is to draw your readers in quickly before they toss your letter out with the recycling. When you use a strong hook to get your reader’s attention early in your writing, you’re more likely to draw them into your story and keep them interested.

Tip 3. Make a connection

Once your reader is hooked and interested in what you have to say, it’s time to make a meaningful connection. You do that by pointing out a challenge your reader is most likely facing and empathizing with their situation. Let them know you understand where they are and how they feel.

Example: I understand how challenging the current market is and how it must be weighing on your decision.

Tip 4. Give your unique value proposition

Now that you’ve made a meaningful connection with your prospect, it’s time to set yourself apart from your competitors. Share what you do that makes you a better choice than any other agent. What do you provide to your clients that other agents don’t? 

Example: When you work with me, you’ll get an empathetic ear, a caring touch, my years of probate expertise, and the professionalism to see your transaction through smoothly.

Tip 5. Provide the solution

You’ve introduced yourself, made a meaningful connection, showed empathy for their current situation, and shared what sets you apart from the competition. Now, it’s time to present the solution to the prospect’s problem. In case you’re wondering what the solution is, it’s hiring you. 

Example: Let me simplify your home sale, ensuring you get the highest price for your home in the least amount of time.

Tip 6. Include a call to action

Now that you’ve convinced them that you are the solution to their real estate needs, tell them what you want them to do next. This doesn’t have to be sleazy or pushy. Make it simple. Just give them some direction on how to get in touch with you so they can hire you.

Example: Send me a text or call me at the number below to get things started.

7. Finish like a champ

Be sure to thank them for reading your letter and considering you for their real estate needs. It’s courteous, and you want to end on a positive note. Also, don’t forget to include all of your contact information under your signature. You might want to include your website (especially if they can find testimonials there) if they want to learn more about you.

Example: Thank you for taking the time to read this and for allowing me to present my value. I hope you’ll consider working with me to get your home sold.

FAQs

What are real estate prospecting letters?

Do real estate prospecting letters work?

Why are real estate prospecting letters effective?

Over to You

Have a unique real estate prospecting letter that converts well for you? Let us know about it in the comment section.

The post The 11 Best Real Estate Prospecting Letter Templates appeared first on The Close.

1. Leverage Your CRM to Keep Your Sphere Warm

Your sphere of influence is your secret weapon in real estate—and your customer relationship manager (CRM) is the key to unlocking its full potential. By setting up automated campaigns that keep you in touch with your contacts through emails and text messages, you’ll stay top of mind when they’re ready to make a move.

Here are a few ideas:

• Create a targeted email campaign to educate buyers on the benefits of home ownership.
• Write an email campaign that keeps your seller leads current on the latest market trends.
• Send holiday emails, including client birthdays, home purchase anniversaries, National Donut Day, etc., to keep you top of mind with your sphere of influence.
• Send automated quarterly emails to your sphere asking for referrals.
• Create videos to embed in your text messages and emails (try a platform like BombBomb) sharing interesting facts about your town.
• Send text messages to your past clients asking for 5-star reviews.
• Share local events with your database via text and email.
• Create an email newsletter for your database.
• Set up listing alerts for your buyer leads to go out automatically when a new home that matches their criteria hits the market.

With so many great CRM options tailored specifically for real estate agents, you’re sure to find one that fits your needs and budget. Still trying to figure out where to start? Check out our article on the best real estate CRMs to find the perfect fit for your business. Trust me, investing in a solid CRM and putting it to work for you can make all the difference in keeping your pipeline full and your commissions flowing, no matter what the market’s doing.

2. Fill Your Pipeline With Paid Leads

When the market slows down, keeping your pipeline full is crucial—and paid real estate leads can be a game-changer. Whether you’re an individual agent, a team leader, or a broker, there are plenty of ways to keep those leads coming in. 

Check out some of my favorite paid lead generation companies:

• Buyer leads: Zillow
• Homesellers: SmartZip
• Digital leads: Zurple
• Affordable leads: zBuyer
• Probate leads: Catalyze AI

These experts know how to target the right people with the right message at the right time, serving up hot leads ready to convert. However, not all paid leads are created equal. To make the most of your investment, be sure to:

• Do your homework and choose a well-reviewed lead generation company.
• Select a company that delivers quality leads that fit your target market.
• Experiment with different lead generation strategies to find what works best for you.

With the right approach and a little bit of hustle, investing in paid leads can be a smart way to keep your business thriving, even when the market’s not cooperating. So, don’t be afraid to explore your options and find the perfect match for your business.

Looking for a powerful CRM that can also generate exclusive leads? Get a predictable number of exclusive and affordable social media leads monthly with Market Leader.

3. Control Your Destiny by Hitting the Phones

In a slow market, it’s easy to feel like success is out of your hands. But one tried-and-true strategy puts you back in the driver’s seat—hitting the phones and cold calling. This tactic is a powerful way to learn how to make money as a real estate agent and land some listings, even when the market is challenging.

Now, I know what you’re thinking—cold calling isn’t exactly the most popular strategy these days. And it’s true—it’s not for everyone. But hear me out! You’re taking control of your productivity and pipeline by reaching out to FSBOs, expireds, your farm, and other potential leads. And with some great cold-calling scripts in hand, your confidence will grow with each new call.

Here’s the thing: When you’re the one making the calls, you’re not waiting for leads to come to you. You’re actively seeking opportunities and starting conversations that can lead to real business. And while it may take some time to learn how to convert leads over the phone effectively, the payoff can be huge.

Of course, cold calling isn’t the easiest way to learn how to make money with a real estate license. It takes persistence, patience, and a willingness to step outside your comfort zone. But if you’re ready to put in the work and learn the skills, cold calling can be a compelling choice to keep your pipeline full and your business thriving, no matter what the market’s doing.

Get started with the right tools. If you’re ready to tackle this cold-calling strategy, REDX delivers fresh leads directly to your fingertips. You can choose which type of leads you want to work with and only pay for what you need. Plus, their built-in dialer saves your finger muscles from all the number-punching.

4. Find Future Buyers by Nurturing Renters

When the market slows down and real estate buyer leads seem scarce, it’s time to get creative. One often-overlooked source of potential buyers? Renters! Targeting renters is a smart strategy when learning how to make money as a real estate salesperson, even when the market is challenging. The people signing leases could be your next big sale. By marketing directly to renters and nurturing their relationships, you can groom them to become your future buyer clients.

Think about it: Renters may not be ready to buy right now, but by staying in touch and providing valuable information about the homebuying process, you’ll be the one they think of when they are ready to take that next step.

So how do you tap into this potential gold mine of leads? Here are a few ideas:

• Offer free resources, like a “Renter’s Guide to Buying a Home” or a “How Much Home Can I Afford?” calculator.
• Host informational seminars or webinars specifically geared toward renters (partner with a lender to get those questions answered).
• Partner with local apartment complexes to provide referral incentives.
• Use targeted social media ads to reach potential renters in your area.

5. Build Relationships With Developers 

When the market starts to cool and traditional sources of business start to dry up, building relationships with real estate developers and investors can be a lifeline. Here’s the thing: While the average buyer may be tightening their purse strings in a slow market, investors tend to do the opposite. They know that the secret to building real estate wealth is to buy when everyone else is sitting on the sidelines—and they typically have the means or know some hard money lenders to do it.

As Warren Buffett famously said, “Be fearful when others are greedy, and greedy when others are fearful.” When the market is retreating, and everyone else is watching their pennies, that’s when savvy investors are ready to pounce.

So, how can you find real estate investors and tap into this revenue source? It all starts with building relationships. Here are a few ideas:

• Attend local real estate investor meetups and networking events.
• Join online forums and social media groups geared toward developers and investors.
• Offer specialized services, like property management or renovation consulting.
• Provide valuable market insights and data to help investors make informed decisions.
• Focus on real estate investing niches like fix-and-flip or cashflow investors.

Of course, working with investors isn’t always easy. They can be demanding and may have different priorities than traditional buyers. But if you’re willing to do the work and build those relationships over time, you may just find that investors are the key to keeping your pipeline full and your business growing—and a dynamic way to learn how to make money as a real estate agent. 

Need to learn the inside scoop on hard money lenders to share with your investor clients? Check out Kiavi. From bridge loans to fix-and-flip funding, Kiavi uses state-of-the-art tech to streamline the process and make funding easier for investors.

6. Choose a Lucrative Niche

When learning how to make money in real estate, there are plenty of opportunities across all types of properties and markets. But if you’re looking to maximize your earning potential, a few specific areas tend to be more lucrative than others.

Commercial Real Estate

One of the most profitable areas of real estate is commercial property. This niche includes everything from office buildings and retail spaces to warehouses and industrial properties. Commercial real estate deals are larger and more complex than residential transactions, often with higher commissions and fees. Commercial properties often have longer lease terms and more stable tenants, which can provide a steady income stream over time.

However, breaking into the commercial real estate market can be challenging, especially for agents who are used to working with residential clients. In most cases, you’ll need to obtain additional designations, such as the Certified Commercial Investment Member (CCIM) designation, to show your expertise and credibility in the commercial space.

Luxury Real Estate

If commercial real estate isn’t your cup of tea, luxury real estate is another highly profitable area to consider. This market focuses on high-end properties and affluent clients, which can translate to significant commissions and fees. Unlike commercial real estate, you don’t necessarily need additional licenses or designations to break into the luxury market—although pursuing certifications like the Luxury Homes Certification can help establish your credibility and expertise.

One of the biggest advantages of working in the luxury real estate market is that the skills and strategies you’ve developed in residential real estate are highly transferable. You’ll still need to focus on building relationships, providing exceptional client service, and staying up to date on market trends and best practices, but you won’t need to start from scratch regarding your knowledge and experience.

If you’re interested in making the transition from residential to luxury real estate, there are a few key steps you can take to set yourself up for success:

• Educate yourself on the luxury market and the unique needs and preferences of high-end clients.
• Build a strong personal brand and online presence that showcases your expertise and value proposition.
• Network with other luxury agents, brokers, and industry professionals to expand your reach and referral opportunities.
• Develop a targeted marketing strategy that speaks directly to the needs and desires of luxury buyers and sellers.
• Provide exceptional, white-glove service that goes above and beyond what clients expect.

For more detailed guidance on becoming a luxury real estate agent, check out our guide that walks you through the process step-by-step.

And if you’re really ready to level up your real estate business, explore the gorg website designs of Luxury Presence. If you’re competing with other luxury real estate pros, you’ll need a site that can keep up. Your image is important in the luxury game, and you’ll need high-end branding. Luxury Presence is an all-in-one platform that manages your online presence with stunning websites that generate leads to help you get your sophisticated brand out in front of all the right eyeballs.

Ultimately, the type of real estate that makes the most money will depend on your unique skills, interests, and market opportunities. Whether you specialize in commercial, luxury, or another niche market, the key is continuously educating yourself, building your network, and providing exceptional value to your clients. With the right strategy and mindset, you can build a highly profitable and rewarding career in any area of real estate.

7. Identify an Underserved Niche

When the competition is fierce and the market is slow, it’s time to get specific. One of the smartest strategies for standing out and generating leads is identifying an underserved real estate niche in your market and becoming the go-to expert in that area. If you want to know how to make money in real estate agent niches, this is how to do it.

Now, you might be thinking—won’t narrowing my focus limit my potential business? But the truth is, the smaller your niche, the more targeted (and effective) your marketing efforts can be. By honing in on a specific group of buyers or sellers, you can tailor your messaging, build deeper relationships, and establish yourself as the authority in that space.

So, what are some potential real estate niches to explore? Here are just a few examples:

• Probate
• REO (Real estate owned)
• Military relocation specialist
• Vacant land
• Agricultural
• Divorce and probate
• Senior living
• Investors

Keep in mind that not every niche will be a fit for every market. While military housing might be an ample opportunity in some areas, it may not be relevant in others. And beachfront condos might be a hot commodity in coastal towns, but they’re probably not a factor in inland cities.

The key is to identify a niche that aligns with your market and expertise and then go all-in on becoming the best in that space. Focus all your marketing efforts around that niche, from your website and social media presence to your networking and referral strategies. By doing so, you’ll be well on your way to answering questions about how to make money as a realtor.

And don’t be afraid to get ultra-specific. For example, instead of focusing on “farmhouses,” you might specialize in “horse farms or equestrian facilities from 5 to 25 acres.” The more targeted your niche, the easier it will be to establish yourself as the go-to resource for that group.

8. Become the Expert Other Agents Turn To

One real estate side hustle that offers multiple benefits is becoming the agent other agents turn to for advice and expertise. By positioning yourself as a leader and educator in your industry, you’ll attract more buyers and sellers and create opportunities to monetize your knowledge.

Here’s how:

• Start by centering your marketing efforts on teaching other agents how to build their businesses.
• Share your insights, strategies, and best practices through blog posts, social media content, and online courses.
• Create digital tools and resources that other agents find valuable, like checklists, templates, and downloadable guides.
• Capture the email addresses of agents who download your tools so you can continue to market to them.
• If you have design skills, consider creating digital products to sell online (think Etsy).
• Look into becoming a faculty member with your state association to teach real estate agents CE courses to maintain their licenses.
• Share your knowledge on a larger platform by becoming a freelance writer for real estate publications like TheClose.com or realtor.com.

By monetizing your expertise in this way, you can create a lucrative side hustle that complements your core real estate business.

Becoming a real estate expert other agents turn to takes time, effort, and consistency to build your reputation and establish yourself as a thought leader. But the payoff can be huge—not just in generating leads and closing deals but also in creating additional revenue streams that can help you ride out any market.

9. Manage Properties That Don’t Sell

As a real estate agent, you’ve probably encountered this scenario before: You’ve listed a property for a client, but due to circumstances beyond their control (like a military relocation), they must move before the home sells. While this can be frustrating for everyone involved, it also presents a unique opportunity for you to expand your services and generate additional revenue.

One smart strategy is to offer to manage the property for your client as a rental. By taking on the role of property manager, you can help your client avoid the stress and hassle of dealing with tenants and maintenance issues from afar—all while creating a new income stream for your business.

Of course, before you start offering property management services, there are a few key things to remember. Check with your broker to ensure that your brokerage is set up to manage properties and that you follow all in-house rules and regulations. In some states (like Florida), you may need a broker’s license to manage rental properties for others legally, so be sure to do your due diligence and comply with all relevant laws and regulations.

Assuming you’re able to move forward with property management, there are a few best practices to keep in mind:

• Communicate clearly with your client about your fees, services, and expectations.
• Screen tenants carefully to ensure a good fit and minimize turnover.
• Stay on top of maintenance and repair issues to keep the property in top condition.
• Keep detailed records of all income and expenses for tax purposes.

By offering property management services, you can provide a valuable solution for clients whose homes don’t sell right away—and create a lucrative new revenue stream for your business in the process. And who knows? You may even discover a passion for property management, leading to a new career path.

10. Create a Solid Business Plan

One of the biggest mistakes new agents make is assuming that simply having an active real estate license is enough to start raking in the dough. In reality, success in real estate requires a clear plan and a strategic approach. That’s where a clearly defined business plan and marketing plan come in.

Your real estate business plan should outline your goals, target market, unique value proposition, and financial projections. It should also include a detailed budget for marketing, technology, and continuing education expenses. By treating your real estate career like a business from day one, you’ll be better equipped to make smart decisions and invest in the right tools and resources to help you grow.

Your real estate marketing plan, on the other hand, should focus on how you’ll attract and retain clients. This plan might include tactics like:

• Building a strong online presence through a professional website and social media profiles.
• Networking with other local businesses and community organizations.
• Developing a niche or specialty to differentiate yourself from competitors.
• Creating valuable content (like blog posts or videos) to establish yourself as a thought leader.
• Leveraging email marketing and other outreach strategies to stay top-of-mind with past and potential clients.

By creating a comprehensive marketing plan and executing it consistently, you’ll be able to generate a steady stream of leads and build a reputation as a go-to agent in your market.

So, how do you make money as a real estate agent? It certainly takes effort and strategic planning. But for those willing to treat their real estate career like a business and work to build a strong foundation, the rewards can be life-changing.

11. Manage Expectations Based on Your Specific Market

Many agents set a goal of making six figures, but the path to achieving it can look different for everyone. There’s no one-size-fits-all formula on how to make money as a real estate agent—instead, it’s about understanding your market, setting clear goals, and consistently taking action to move the needle forward. 

One of the first things to consider when aiming for a six-figure income is your market and niche. Real estate agent salaries vary from one market to another. In some areas, selling a single multi-million-dollar property could be enough to generate a six-figure commission. In others, you may need to sell a dozen or more homes at a lower price to achieve the same goal. Understanding your market and the types of properties and clients you want to work with is key to creating a realistic and achievable plan for success.

Set Concrete Goals

Once you clearly understand your market and niche, it’s time to set some concrete goals. This phase is where reverse engineering comes in. Start with your ultimate goal (e.g., making six figures in a year) and work backward to determine what you need to do each month, week, and day to get there. For example, if you know you need to sell 12 homes at an average price of $300,000 to make six figures, you can break that down into monthly, weekly, and daily targets for real estate prospecting, setting appointments, and closings.

Learn to Convert Leads

But setting goals is only part of the equation—you also need the skills and strategies to achieve them. One of the most important skills for any real estate agent is the ability to convert leads into clients. This ability means mastering the art of asking leading questions, handling objections, and turning “no’s” into “yeses.” Any time you invest in learning and practicing these skills is time well-spent, as it can directly impact your ability to generate more business and close more deals.

In addition to lead conversion skills, there are a few other real estate agent tips that can help you achieve a six-figure income as a real estate agent:

• Build a strong personal brand and online presence to attract more leads and referrals.
• Focus on providing exceptional client service to generate repeat and referral business.
• Continually invest in your education and professional development to stay ahead of market trends and best practices.
• Leverage technology and automation to streamline your business and free up more time for revenue-generating activities.
• Surround yourself with a supportive network of colleagues, mentors, and industry experts who can provide guidance and accountability.

Ultimately, making a six-figure gross commission income (GCI) as a real estate agent is about setting clear goals, developing the skills and strategies to achieve them, and consistently taking action toward your vision. It’s not easy—but with hard work, persistence, and a willingness to continuously learn and adapt, it’s an achievable goal for any agent committed to success in the industry.

FAQs

Is it hard to make money as a real estate agent?

Is being a real estate agent a good side hustle?

Your Take

How to make money as a real estate agent is a big question. Many roads lead to a lucrative real estate business. This list is just the tip of the iceberg. The trick is there is no trick—you can achieve as much success as you’re willing to work for. The beautiful thing about real estate is you can make it into anything you want. Whether you want to become a coach, a real estate investor, a template designer, or the most successful luxury agent in your market, the world is your oyster. But first, be sure to set clear goals so you’ll have a roadmap to get where you want to go.

Do you have a cool real estate money-making secret? How are you designing your real estate empire? I’d love to hear about it in the comments!

The post How to Make Money as a Real Estate Agent: 11 Strategies to Earn More appeared first on The Close.

1. Vacation Rental Investors

Many first-time homebuyers are on the sidelines, strapped by the current interest rates coupled with historically high home prices. So, if your focus has been on first-time homebuyers, it might be time to pivot to a niche that’s less affected by the current market. Thankfully, short-term rentals (STRs) are still lucrative, even in the current economy. 

It’s true that escalating home prices, along with increased regulations and fees, have slowed the STR boom of 2021. But, as you can see from the infographic above, that leveling out will turn down the crazy and keep a lot of people who shouldn’t invest out of the pool, making it easier for serious investors to buy properties smartly.

And your expertise around your market’s permits, demand, and fees for STRs and vacation rentals will set you apart from other agents. You can become the one investors turn to for accurate market updates and listings. 

How to Start Working Rental Property Investors

First, make sure to familiarize yourself with your market’s regulations and restrictions for vacation rentals. There are usually different rules for long-term vs short-term rentals, so get to know your community’s permit requirements along with the amount of any fees.

You also should enroll in a few continuing education classes through your association that deal with short-term and long-term rentals, investors, and even try dipping your toes into some commercial real estate classes. If vacation rentals aren’t your thing, you can also consider other types of real estate investing. Gain as much knowledge as you can around real estate as a business.

You’re bound to have a community group that stays in touch on Facebook—or even in person—that you can join. Bigger Pockets is a good place to start looking if you’re not sure where to start in your market. But if you search Google for real estate investment groups in your area, you’re bound to turn up a few more options. Once you join a group, get involved in discussions, offering your real estate expertise. Become the knowledgeable agent in the room that people come to with their questions. 

Get a head-start by learning the BRRR (buy, rehab, rent, refinance, repeat) method for investors by downloading this e-book from Kiavi. You’ll be the agent everyone turns to when you learn the ins and outs, pitfalls, tips, and financing secrets of successful real estate investors.

2. Rentals

This summer, median home prices increased nearly 2% from one year ago to $406,700. And with mortgage rates currently sitting around 8%, this puts homeownership on ice for many. That leaves more people flocking to rentals. The rise of “digital nomads” as a lifestyle also means more people are looking for housing options that allow them to travel around the country and the world. This means working rentals can become a lucrative niche for agents in 2024.

When I was an agent in New York City, I made $1,500 to $3,000 per closed rental transaction. Agents who worked high-end exclusive rental listings sometimes collected five-figure commission checks from one closed rental deal. While results like these might not be common in all rental markets (it’s New York City, after all), it proves that rentals can be very lucrative for real estate agents. 

There are two ways to do this in smaller markets: 

1. Increase volume

2. Get exclusive rental contracts with developers

How to Start Working Rentals

If you’re working in a market that focuses on high-end luxury rentals, you can join a brokerage that focuses on rentals to tap into that market. If you’re not, get licensed in property management if your state requires it and start pitching builders and developers.

With the market cooling in many areas, homeowners may need to temper their expectations. But if they’re needing to leave the area (say in the case of a military permanent change of station move or new job), you might offer to manage their home as a rental. You’ll be helping your clients start or build a rental portfolio while you also expand your experience and skill set. 

One of the easiest ways to stand out in the crowded property management market is to sharpen your digital marketing skills. Create a website where you can showcase rental properties and drive traffic from your marketing efforts, then offer to build one for free for a local developer.

If you want to work the sales side, start educating your sphere on real estate investing with an eye toward renting. You can get started with these deep-dive articles on real estate investing from Sean Moudry:

3. Military Movers

Speaking of permanent change of station (PCS) moves, one group who will move no matter what the economy is doing is the active-duty military members. They don’t pay for their move, and they have to go when they get PCS orders from military officials. So, you can always count on members of the military moving every few years. 

Most military members will get orders in the spring for a summer move. So, summers are typically busy with PCSers. But there’s also a secondary PCS season that many overlook: end-of-year moves. It’s not as busy as the summer, but there is a substantial number of military folks who get orders to pack up during December. 

The best part of military movers is they typically use their Veterans Affairs benefits, which allows them to get a mortgage with zero down payment. That makes buying a home in their new duty station easier since they won’t have to come up with a substantial amount of cash to buy. Military movers also make a great niche for you because when their tour is up and they have to PCS again, usually within a few years, they will most likely reach back out to you to either sell their home or help them set up the home as a rental property. 

How to Start Working Military Movers

If you live near a military base, this niche will work for you. Start by learning about the military community and familiarize yourself with their lingo. There are a lot of acronyms military members throw around, and you want to sound like you know what you’re talking about. 

You can also become an MRP, or military relocation professional. It’s a designation that will take about a day to acquire. Once you learn the language and get that MRP, join the military base groups on Facebook (particularly the spouses’ groups) and get to know your local military community. 

You can also create social media content educating those moving to your area. Remember, these folks PCSing to your market know practically nothing about it. You can share information about different communities, what it’s like to live in your city, steps for the homebuying process, how to use VA benefits on real estate, and so much more. 

If you really want to dive deeper into the steps involved in the military movers niche, check out this in-depth article from Kinga Mills:

4. Probate Sales

When a homeowner dies, a property typically has to go through some type of probate court before it can be conveyed to a surviving family member or person named in a will. Often, a home is left to a spouse or adult children, who then need to sell the home and share the proceeds from the sale. 

These are the people who need your help. Adult children, in particular, will need a professional to help them get the home on the market, especially if they don’t live in the same area as the home. And if you can help them sell the property quickly, getting them through a tough time in their lives, they will be forever grateful.

How to Start Working Probate Sales

Getting into probate can be a little tougher than some other niches listed here, but it’s not as difficult as you might think. The first step is to familiarize yourself with the probate process. You can check your local association to see if they offer courses to understand probate. 

After you’ve learned more, you might consider reaching out to probate attorneys and pitching your services to them. It never hurts to establish yourself in your community, make connections, and build relationships. Even if one of the attorneys is working with another agent right now, they may end up with more work than the one (or two) agents can handle. 

If you really want to up your probate real estate game, you might consider checking out predictive analytics software that can actually find them for you before anyone else has a chance. Catalyze AI utilizes event-driven data to send you listing leads. You can be the first agent to reach out and get a jump on the competition.

5. Vacation Homes

Vacation communities—like The Hamptons in New York, or the beach houses of Clearwater, Florida—will continue to be an excellent niche for agents. Many of these communities saw the largest influx of new buyers in 2020. But even in the current sluggish market, the vacation home market will continue to draw those who can afford this lifestyle.

How to Start Working Vacation Communities

If you work near a vacation community and have the listings in your MLS, start marketing them to potential buyers using an IDX website. The idea is to curate listings from a vacation destination to a page on your website using IDX widgets, then drive paid and organic traffic to that page. If you don’t already have an IDX website, use this as an excuse to finally build one. You can learn how here: How to Build an IDX Real Estate Website: The Ultimate Guide.

In your marketing, promote the lifestyle more than the listings. Remember, this niche is all about the idea of getting away from the hustle of everyday life. They want to see the dream. For inspiration, check out Michele Bellisari. She’s a pro at promoting the Boca Raton lifestyle in her social media marketing.

6. Luxury Real Estate

No matter what the market does, the wealthiest will always use real estate to build more wealth into their portfolio. So if you live near a luxury area, like New York or Los Angeles, chances are inventory is ridiculously tight, and many homes may be selling above asking price. But luxury isn’t confined to only the biggest cities. You can find luxury in many areas, including the mountains and the beaches. 

How to Start Working Luxury Real Estate

Finding luxury buyers to work within this market is relatively easy. You can advertise on Facebook or Google, network, or just join a luxury team. You’ll want to give your branding and marketing materials a bit of a polish before you start, though. A strong brand is far more important for agents transitioning to luxury.

For listings, the road is rougher but possible. If you’re serious about transitioning to luxury listings, check out Sean Moudry’s excellent article below. Sean has been in real estate for 29 years as a broker, coach, speaker, author, and consultant, and he has a wealth of experiences to share.

7. FSBOs

Some agents shy away from working for sale by owner (FSBO) listings because they believe iBuyers are snatching up all the inventory. But not so fast! We’ve seen Redfin, Zillow Offers, and a handful of other iBuyer models fold or pull back the reins on home purchases. 

So, FSBOs are still in play and can be a plentiful source of listing leads for any resilient agent. It makes sense when you think about it. The market is cooling, and homeowners still haven’t learned how to sell houses. So, while investors may still be a factor, learning to pitch FSBOs can put agents ahead of the game. 

How Agents Can Start Working FSBO

Of course, pitching FSBOs is not easy. In fact, it will take practice to get good at turning an FSBO into a listing. The housing market of 2021 left many homeowners thinking that selling houses is simple. As agents, it’s our responsibility to show our value, manage expectations, and prove that agents are worth the commission. The trick is to establish a relationship with them before the reality of selling their home finally sinks in. 

You can start by learning and practicing FSBO scripts. Chris Linsell broke down his seven favorite FSBO scripts here and explained why they work so well: The 9 Best FSBO Scripts (+ Why They Work).

If you’re ready to jump feet-first into the FSBO world, you should consider looking into REDX. They curate expired and FSBO listings daily, delivering accurate data so you can reach out to sellers before the competition. Don’t waste time on inaccurate phone numbers or get into hot water over the Do Not Call list. REDX scrubs its data to make sure you’re only getting the freshest info. Keep track of your contacts inside the REDX CRM so you can nurture and convert your leads easily.

8. Empty Nesters & Downsizers

Today’s millennial homebuyers face tight inventory, rising home prices, rising rents, and high student debt that are all converging to keep them out of the real estate market. So it’s no surprise that the largest shares of homebuyers in 2022 were the 55 to 64 and the 65 to 74 age groups, together accounting for 42% of all buyers, according to the National Association of Realtors’ Profile of Buyers and Sellers report.

Looking at the data, it’s no wonder that the 55-plus age group is the biggest homebuying segment. They typically have equity in their existing home to make a move work. 

Most of these prospects are moving to be closer to family or to downsize. But don’t forget to target those who are looking to make lifestyle moves—think golf, pickleball, and boating. If you live near a 55-plus planned development, like the now infamous retirement community The Villages of Florida, you might want to consider them in your marketing strategy.

How Agents Can Start Working Empty Nesters & Downsizers

Start off by brushing up on the communities near you that target this demographic. Find out the features and benefits of each one so you can rattle off information in a conversation easily. Next, you might consider a print campaign in some of the older neighborhoods in your community. Target homeowners who have lived in their homes for more than 10 years. Your campaign should feature the benefits of moving to a community with a fun lifestyle for its members.

You might also consider getting a Seniors Real Estate Specialist (SRES) designation to learn the ins and outs of meeting the needs of this fast-growing niche. Sean Moudry explains the designation at length in this article: The SRES Designation: Is It Worth It for Residential Agents?

Over to You

Know of an underrated real estate niche you think is poised to become more lucrative this year? Let us know by leaving a comment below.

The post 8 Red-hot Real Estate Niches That Can Double Your GCI in 2024 appeared first on The Close.

An economic downturn provides many opportunities that are nearly impossible for the average investor to take advantage of in a good economy. Despite this, many agents have a hard time persuading would-be investors that a downturn is the right time to jump into the real estate market and start investing.

To help you educate your clients, I’m going to share my most persuasive reasons why your client should start investing in real estate right now. But first, let’s get a handle on the basics.

Is Right Now Really a Good Time to Invest in Real Estate?

It’s a fair question! I’ll get into the specific reasons below, but let’s take a minute to orient ourselves.

A Look at the Current Market in 2023 

The market is anything other than typical right now. According to the National Association of Realtors’ latest existing-home sales data, sales are down 23.2% and prices are down 1.7% from this time last year. The association’s chief economist characterized it as “bouncing back and forth,” with interest rates, low inventory, and job gains contributing to “an environment of push-pull housing demand.”

Inventory is low and prices are high, but that situation is not going to remain true forever. Kate Evans recently did a deep dive into why the market is so hard for first-time buyers to get into, but she also noted that there are positive signs around inventory and interest rates.  

Benefits of Investing in Real Estate Right Now 

Again, we’ll dig into this in more detail below, but certain submarkets offer more value than others, which is why I see right now as a good time to invest in real estate. 

But also, for certain investors, I do think time is of the essence. I worry in particular about younger buyers and investors who might miss out on one of the last opportunities in their lifetimes where they will be able to buy undervalued real estate before the market becomes unaffordable again. So I hope I can help you and your clients understand how to leverage today’s investment landscape so you can pounce on more opportunities as they arise. 

OK, now let’s dig into the reasons I see right now as a good time to invest in real estate. 

Reason #1: Recessions Create More Opportunities to Invest

I know what you’re thinking; “There isn’t enough inventory and house prices are too high. How am I going to find properties for investors to buy?” Well, the good news is that inventory is going to increase.

Many people, even real estate agents, don’t realize that there are actually three real estate submarkets happening in the residential space at the same time. These submarkets occur simultaneously in every market, everywhere and all the time … without exception! 

Retail Market

I’m not talking about your local corner store here. This retail market is reflective of a sale between a seller who is not in financial or personal distress and a buyer who is not being influenced to buy due to their circumstances. It’s the typical real estate transaction—what agents refer to as “market value.” 

Due to the massively low housing inventory that isn’t likely to change in the near future, housing prices in the retail market are not expected to substantially change, up or down, even if we see a full recession. This is because most homeowners have a low interest rate and an affordable payment, and most homebuyers don’t have a lot of economic or social pressures to buy. Therefore, we’re most likely to see price movement in the other two submarkets.

Motivated Sellers

The motivated seller category is the submarket where you will find homeowners who are facing financial distresses like bankruptcy, foreclosure, and job loss or relocation. They may also be facing a personally distressing situation such as divorce, health issues, or even a death in the family. 

Motivated sellers don’t have the luxury of time, like the sellers in the retail market do. Their unique situation requires them to resolve their circumstances within a defined time frame. Some as little as a few days!

While these situations also occur in a strong economy, the circumstances of super-low inventory and high buyer demand mean that sales involving motivated sellers transact at nearly the same price as a retail sale. This is because the entire market is in a phase that we call compression. 

However, during a slower market, the opposite occurs: The price gap between the retail and motivated seller submarkets increases since the motivated sellers will have to price the property aggressively to attract more offers. They will also lean toward accepting a lower-priced offer with fewer contingencies (think cash and as-is) because they must resolve their situation quickly. This causes the market price gap to further increase, what’s known as a market expansion.

Distressed Properties

The distressed property submarket refers to homes that cannot be sold to a traditional buyer. This is commonly due to the condition of the property or potential title and legal issues. 

Distressed properties include homes that have been neglected for years, have fire or flood damage, and bank-owned homes with no plumbing (because the copper was stolen). Like the motivated seller market, prices in the distressed property market decrease more rapidly during a receding economy. 

This is because not only are there more neglected properties during recessions, it is nearly impossible to get traditional financing for this type of property when the real estate market is receding. During the Great Recession we saw the distressed home submarket drop as much as 50% in just a few years. 

The challenge for most real estate agents is that many motivated seller and distressed property opportunities never make it to the MLS. This is because there’s an entire industry that buys and sells these homes off-market. The key for an agent to be successful in this category is understanding how to find motivated sellers and distressed properties. 

I encourage you to check out my article on finding hidden inventory here, but also, there are some automated tools that can help. For example, Chris Linsell recommends autodialer REDX as a ready-to-use platform for agents with easy-to-navigate tools and only the slightest learning curve.

Reason #2: Economic Factors Will Shift Markets

As we have emerged from the pandemic and now face a slowing economy, some market sectors will remain strong and others are beginning to decline. 

Real Estate Hot Spots

Despite the uncertain economy, the real estate industry across the country has remained robust. This is mainly because regional economic impacts have motivated some Americans to move for work or due to the high cost of living in their current area. Others are moving for what I’d call “political reasons.”

We are already seeing the impacts of this. Large expensive cities like San Francisco are continuing to lose population to more affordable areas like Sacramento, California. Cities in Florida are seeing an increase in migration from states with opposing political views. And people are moving away from Florida for the same reason.

During recessionary times, look to invest in areas where the population is growing. Increased population will support rental rates and thus property values. These hot spots will likely outperform other areas in both cash flow and appreciation.

Secondary Home Market 

Wealthy homeowners who had previously picked up a second home or vacation rental to escape crowded metropolitan areas during the pandemic are now reconsidering the need to own multiple homes. This fact, combined with a 52% drop in mortgage rate locks for vacation rentals (as reported by Redfin) simultaneously may place price pressure on secondary home markets.

Simply put: During economic slowdowns, second homes and vacations are a luxury that most people will cut back on. These cutbacks will trickle down to the real estate market as vacation rental investors struggle to keep properties occupied and profitable.

While at first look this may not sound like a positive reason to jump into real estate investing, it does set the stage for some good opportunities for investors who wish to invest in vacation areas in the near future.

Overall, the migration out of expensive cities will begin to increase inventory, making these types of property more affordable. And competing vacation property sellers will continue to lower their prices, making the previously unaffordable cities and vacation spots accessible to deal-seeking investors like myself.

If you have some patience, you can also look for foreclosures from overleveraged Airbnb investors. Since most second home buyers won’t bother with the hassle of buying a foreclosure, you might find yourself with property you can fix and flip. To learn the ropes of fixing and flipping properties, check out Kiavi’s deep-deep Ebook below.

Reason #3: Don’t Wait for the Bottom of the Market

Many people feel that investing in a falling or soon-to-be-falling real estate market is a mistake. But if you take into consideration the bigger picture, now may be the best opportunity for your clients to invest.

Timing the Market Rarely Works

I have been selling and investing in real estate for more than 29 years, and I still can’t predict the market. Back in 2018 many, including myself, predicted that the real estate market was reaching a peak and that it was going to turn any day … and it did. 

For a few months, at least. Then it turned and continued to rise for the next three years! If I can’t time the market, neither can you. But this is more than just being lucky or able to predict the future. Even if you could know exactly what was going to happen, you likely can’t act upon it. Here’s why:

Fewer Financing Options

Buying at the bottom of a recession isn’t always easy or even possible. Consider the 2008 recession. If your client was to buy at the top of the market in 2007, when the average home was $257,000, they would have lost 19% of their home’s value by 2009.

However, if they held on to the property until 2020 instead of selling, the same property would have seen a 134% increase. Of course, if your client could have timed the market perfectly and bought at the bottom of the market in 2009, and then held the property through 2020, they would have gained an additional 19%.

However, the reality is that likely wouldn’t have happened because loan qualification requirements changed drastically from 2007 to 2009. Banks required higher down payments and put restrictions on the number of investment mortgages a client could have. They also excluded rental income as a way to offset debt-to-income ratios. 

Therefore, it is very possible that your client may not have even qualified to buy an investment property between 2008 and 2014 (when many restrictions were finally loosened). 

If your investor waited to buy at the bottom, in 2009, and couldn’t, they would have missed out on more than five years of appreciation. That is why you should always teach your clients that the best time to invest in real estate is now, since the opportunity may not be available to them in the future.

Reason #4: Real Estate Is a Hedge Against Inflation

Inflation is the result of the devaluation of the dollar in comparison to the goods and services we buy. Generally, the more money that’s injected into markets, the higher the price of goods and services. The CARES Act and Coronavirus Response and Consolidated Appropriations Act injected more than $4 trillion into the U.S. economy, causing the devaluation of the dollar and an increase in inflation.

Since the dollar is worth less and assets are worth more, many savvy investors know to reduce their cash savings by buying real estate assets as a hedge against inflation. Rental real estate is an ideal asset that will not only protect against the lost value of the dollar, but will also provide income during slow economic times.

As inflation rises, so do property values, and so does the amount a landlord can charge for rent. This allows the landlord to earn a higher rental income over time, keeping in pace with the rise in inflation. For this reason, real estate income is one of the best ways to hedge an investment portfolio against inflation.

Reason #5: Housing Supply & Demand

Housing demand happens when the population of a specific area grows from both natural increase (the net of births less deaths) and migration into a given area. Housing supply is the existing safe and functional housing in the area. Supply can only be increased by adding new housing or lowering the demand for homes (making previously occupied existing homes available). 

When demand from both buyers and renters outpaces supply (or current available inventory, in real estate lingo), home prices and rents will rise. Let’s see how demand and supply are projected to behave.

Demand: U.S. Population Growth Will Continue

One of the main causes of an appreciating housing market is a growing population. When an area gains population, rents increase, and home prices will soon follow. Conversely, when the same area’s population decreases and there are more homes than people to fill them, then the home values will fall, like what’s currently happening in Italy.

According to the Census Bureau, immigration is due to surpass natural population increase by 2030. And by 2060, the U.S. is slated to reach a population of 400 million, putting enormous pressure on demand for housing. Unlike in Italy, U.S. housing prices are expected to rise steeply for the foreseeable future. 

New Construction Supply Cannot Keep Up 

The simple, logical solution to solving the supply issue is to build more affordable homes. If only it were that simple. Gone are the days of buying land and building a few low-cost homes in just a couple of months. 

Fewer Homebuilders Today

Nearly 50% of homebuilders did not return after the recession in 2008. Since then, new construction has continued to trail behind demand. 

Homebuilders are hesitant to invest in new developments during insecure economic times. Shifting real estate markets can leave builders at risk of losing millions of dollars if the market declines greatly before their projects are completed.

A confluence of other economic factors are expanding the gap between new construction and housing demand. These include slow planning and infrastructure processes, rising home construction materials and labor cost, and the declining profitability of building homes to meet the needs of the average family. These factors are expected to continue to put upward pressures on new-home prices for decades to come. 

I worry that many investors, especially younger ones, may miss out on the opportunity of a lifetime. For buyers under 40, this may be one of the last opportunities in their lifetimes that they will be able to buy undervalued real estate before the market becomes unaffordable again.

Bottom Line

Of course, no one can see the future. But I believe that house values will likely remain strong and rents will continue to rise, despite an economic downturn. On the other hand, I also think we will see inventory increase due to some homeowners being forced to sell for personal and financial reasons. This will create a few great opportunities.

If there’s one lesson for agents and brokers to take away from all of this, it’s this: The good deals will be absorbed quickly, and the U.S. will return to a highly competitive housing market.

Now is a great time to sharpen your skills and prepare yourself and your clients for the investment market ahead. The shifting economy will surely create opportunities for you and your clients to purchase underpriced real estate and invest in new markets. My hope is that the points I’ve outlined here helped you (and your clients) see why now is a good time to invest in real estate.

The post Why an Economic Downturn Represents the Best Time to Invest in Real Estate appeared first on The Close.