Software is the new real estate

Real Estate. Countless books and blog posts have been written about how to use homes, apartments, and commercial real estate to generate monthly cash flow. The oversimplified strategy consists of finding a good deal on a home in a nice neighborhood, coming up with a 20% down payment, purchasing the home, fixing it up, and putting it on the market to rent. From there you use a property manager to find and manage your tenants, or take on that task yourself. The goal is to charge enough monthly to pay for your mortgage, applicable taxes, put some money in your pocket, and set aside a reserve for future maintenance. Over time you generate monthly cash flow while paying down the mortgage liability and turning the value of that home into an asset.

But it's not without risk. Risks of buying a home that needs way more work than expected, not being able to find tenants, getting a bad tenant, unexpected damage and expenses, late-night calls for fixes, or having an economic downturn where tenants can't pay rent — leaving you overextended on your properties. It's not necessarily for the faint of heart.

It's also something I think is a lot harder to do as a side hustle than you'd expect. If you're going to go this route, it could start as a couple homes, but to really have long-term success you need to build a multi-property portfolio, get into apartments, and really jump into it.

I've considered it countless times and have always found more appealing ways to generate revenue. That said, I realize as a designer, developer, sales and marketing expert I may have more tools in my tool-belt than someone who has pursued a different occupation.

However, I think there is a new, modern "real estate." It's Software as a Service subscriptions. It's having people and businesses pay monthly "rent" for using software that makes them money or saves them time. I'm not saying you have to design, develop, and build software from scratch, then figure out a way to market and sell it. No — just like in real estate, you don't need to build the home, you just need to match-make and connect people who need a place to stay with a home.

I've been consulting for 20 years and every time I work with a business owner I see multiple opportunities to help them streamline back-office processes, improve marketing, help with sales, provide IT suggestions, and more.

This is not a joke — here are a couple of things I've seen within the last couple of months:

• A client who has multiple plumbers on staff that need to be scheduled in homes daily. They asked me if there was a way to put their names on a digital calendar for the plumbers to see each day, versus coming to the office every morning to pick up a printed schedule. I've used "shared calendars" for 20 years… Microsoft Exchange, Lotus Notes — they all had it. This team is primarily pen-and-paper, even today. After each job the plumber jots down the work on a sheet; they can't even take payment on the job site. At the end of the day they drop all the sheets back at the office for the back office to type up invoices and mail them out. Lots of opportunities for automation, saving time, and getting money in their hands faster — all by leveraging technology and software.
• I use a specialized vendor for some general office work at my agency. This person has 20–30 clients, but still hand-types invoices — despite tons of great (even free) invoicing options available.
• I had a client who had trouble keeping track of which appointments were booked and wanted to make that available online — something easy where prospects could see their calendar and select a time to meet. Pretty easy stuff, but they had no idea how to get past where they are today.

There are tons of businesses out there with a pain, an issue that needs to be solved. The good news is you can use that opportunity to help them and make money for yourself — and you don't have to create the software products, you just have to know what options are available.

Instead of finding individuals to rent homes, you're finding businesses to rent software. Every time you match a business with a software product, you get a cut of the deal. Many software products have an affiliate or agency commission structure you can leverage to make money recommending or assisting with implementation. The math is a bit different, but a lot of the principles are the same — without the risk and upfront costs.

There are a lot of products with affiliate options; you can read about my favorites in my e-book. For this example I'll use my own product, Boast. Boast offers a 30% commission structure for referred businesses that subscribe. The basic plan is ~$50/mo, which means a referred business would earn you $15/mo in perpetuity for the lifetime of that client. Monthly commissions on a referred business range from $5–$60/mo. It might take ~10 referred customers to reach the monthly cash flow of a single rental. Finding businesses for some products isn't that hard. It might be tricky to convince an organization to switch to an entirely different accounting platform, but it's easy to bring in a product they don't use yet — like online chat, an email newsletter, or a customer-satisfaction / video collection tool.

If you have more time and marketing savvy than guts for taking risk — or patience for working with tenants — then software sales and affiliate marketing might be a great opportunity for you.