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 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 a set aside for future maintenance. Over time you generate monthly cash flow in your pocket, while paying down the mortgage liability and turning the value of that home into an asset over time. But, it is 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 and having tenants unable to pay rent resulting in you being overextended on your properties. Well, it’s not necessarily for the faint of heart.
It’s also something that I think is a lot harder to do as a side hustle than you expect. If you are 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 area of work and 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 their back office internal processes, improve their marketing, help them with their sales, provide IT suggestions, and more.
This is not a joke, here are a couple things I’ve seen within the last couple of months:
- A client who has multiple plumbers on staff that need to schedule them in homes daily. They were asking me if there was a way to put their names on a digital calendar, for the plumbers to see everyday versus them coming to the office each morning and picking up a printed schedule they wrote out. I mean, I’ve used “shared calendars” for 20 years… Microsoft Exchange, Lotus Notes, they all had it… this person and their team are primarily pen and paper folks, even in 2020. After each job the plumber jots down the work done on a sheet, they can’t even take payment or a check on the job site. At the end of the day they drop all the sheets of completed work back at the office for the back office to type of invoices and mail them out. There are lots of opportunities for automation, saving time, and getting money in their hands faster – and it has to do with leveraging technology and software.
- I use a specialized vendor for some general office work at my agency that doesn’t have anything to do with our core business. This person has 20 – 30 clients, but still hand types of invoices — despite there being tons of great and even free invoicing options available.
- I had a client that was having trouble keeping track of what appointments were booked and wanted to make that available online; something easy where prospects could see their calendar, select a time to meet. Pretty easy stuff, but they have no idea how to get past where they are today.
There are tons of businesses out there in the world who have a pain, an issue that needs to be solved. The good news is you can use this opportunity to help them and make money for yourself, and you don’t have to create the software products, you just have to know about 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 some type of agency commission structure that you can leverage to make money recommending or assisting with the implementation of their software products. The math is quite a bit different but a lot of the principles are the same, without the risk and upfront costs.
There are a lot of products that have affiliate options, you can read about my favorites in my e-book. For this example I’ll use my own product Boast as an example. Boast offers a 30% commission structure for businesses referred to Boast who subscribe to a plan. The basic plan is ~$50/mo which means if you referred a business to Boast you would get $15/mo in perpetuity for the lifetime of that client. Monthly commission on a referred business range from $5 – $60/mo. It might take you ~10 customers referred to get you to the monthly cash flow of a single rental. Finding businesses for some products is not really that hard. It might be tricky to try and convince an organization to switch to an entirely different accounting platform; but it’s easy to bring in a product they don’t already use yet like an online chat, email newsletter, or customer satisfaction / video collection tool.
If you have more time and marketing savvy than you do guts for taking risk, or patience working with tenants — then software sales and affiliate marketing might be a good opportunity for you.
