Real Estate Agent Supplements Commissions By Renovating Homes

This transcript was generated from the episode audio and may contain minor errors.

[Music]

Welcome to Side Hustle School. What's up, my friends? So glad you're here. In today's story, a real estate agent in Valencia, Spain supplements his income by renovating apartments. It starts when he grows tired of seeing potential buyers reject promising homes because they were in need of renovation.

When he learns to project manage that renovation himself, he ends up with more sales and an additional $2,200 a month. This is a lesson in spotting a problem and proposing a solution. It's an example of how when something is working, you can often make it work more. In this case, adding a new side income to his main paycheck. And it's a case study of how creative thinking followed by industrious application can take you far.

What's my hope that Side Hustle School is gonna take you far in your own quest for more freedom through additional income by creating an asset for yourself? So this story in lots of detail is coming up right after this message. Stay tuned. [Music]

Graham Hunt works full-time in real estate. As a successful agent in Valencia, Spain, he knows a thing or two about selling property.

Now you've probably heard the real estate agents mantra, location, location, location. It suggests that the main reason to buy a property is for where it is, not what it is. For the most part, this is true, but not always. Seaside homes and tourist hotspots will command a higher price, but there comes a point of diminishing returns where the location doesn't outweigh other factors, such as the quality of the property and its condition. Graham has seen this firsthand during his career.

After selling real estate throughout Valencia, there was a common theme among sellers. They almost never presented their homes well. Many of those homes had been passed on as part of an inheritance, and as such, they hadn't been updated since the 1960s. Sometimes, to be blunt, they just looked awful. By contrast, Valencia is a beautiful place, a coastal city densely populated with both locals and tourists.

Many potential buyers are looking for properties they can use as holiday homes or vacation rentals. It's not shocking that apartments or houses that are a mess are hard to sell. Over and over again, Graham heard, "This is a great location, but we can't see ourselves buying this place as is." In fact, that type of feedback became so common that he could predict it during showings. Sales fell through constantly because of it. These untidy residences in desirable locations were affecting his ability to sell property and to make a living.

He kept thinking, "Why can't the seller put a little more time into sprucing up their place before listing it for sale?" Then, one day, he had a perspective shift. If there was nothing he could do to make the sellers act in their own best interests, perhaps he could convince the buyers to purchase with a little incentive. You see, aside from selling property as an agent, Graham had purchased, renovated, and flipped a few properties in Valencia himself. Throughout that process, he'd made connections with a number of reliable builders, people he knew he could trust to provide good quality work at a reasonable price. He'd also developed a keen eye for what buyers were looking for, and he saw an opportunity to combine these skills and experiences in managing building renovations for new buyers.

He decided to try offering this service as an add-on while showing properties for sale. He would explain to buyers that instead of the property being a fixer upper, he could take the hassle out of everything by acting as a project manager, getting those local builders to renovate the apartment before the new owners moved in. The idea seemed simple enough, and soon Graham had a chance to test it out. One afternoon, he was showing a property by the beach. Sure enough, that issue of untidiness cropped up again.

But this time, before the buyers had time to reject the property, Graham suggested they take a look at a recent renovation he'd completed for an apartment he was planning to flip. It happened to be in the same building with the same layout, so he knew the renovation would do a good job of convincing the buyers. When they walked into that modernized apartment, they were floored. And not just because of the new floor. The renovated apartment looked and felt nothing like the one that was for sale.

Graham explained that if they purchased the apartment, he could project manage the renovation. He would handle the back and forth, and in exchange, he would charge a 100 euro fee per week. That's about $113. He estimated the upgrade would take around 12 weeks. The client would be responsible for paying the builders as well as any cost of materials.

In this case, they wanted the apartment to look exactly the same as the one he had renovated, so it wasn't a difficult task. Not only was Graham able to net a commission from the sale, one that almost got away, but also turned that sale into an additional 1200 euros, or $1,360, in his pocket. To earn that fee, he would personally check out the site once a week to make sure everything was on track. The renovation went off without a hitch. 12 weeks later, the client moved in and couldn't have been happier with the outcome.

Based on that first success, he decided to keep construction going on this little side project. In time, he learned a few things. Graham built out a team of solid builders he knew would only do quality work. He increased his price to 150 euros per week, and in addition, he became more efficient. He would still make one physical visit to the site each week, but if more visits were needed, he used FaceTime to assess the property and avoid an additional trip.

As the client base grew, Graham hired a few part-time project managers. He pays them 50% of the total and keeps the other 50% for himself. He currently serves anywhere from 10 to 20 clients per month, which results in around 2,000 euros in profit each month. That's a bit more than $2,200. This is after he's paid his freelance project managers.

And remember, because of the new service, he's also making home sales that he might have missed out on, so the true profit is likely much higher. This extra income has helped Graham find stability in his work, and on a personal level, he's caring for a son with autism who attends school online. He now has more time to spend with him at home and more money to pay for the school. In the future, Graham hopes to hire more project managers to handle larger renovation projects. That may allow him to build this side hustle into its own sustainable business.

[Music]

A shift in perspective. That's a phrase that I took away from the story as I was working on these notes. For a long time, he's like, "Why in the world are sellers not doing a better job preparing their property for listing? It's in their best interest to do it, but for some reason, it's just not happening." And so that was frustrating, but even if you have the solution, you can't force somebody to solve the problem. So when he had that shift in perspective, began thinking of it from the buyer's side, that's when he had a totally different idea to do this renovation project management, which becomes this side hustle, a couple thousand dollars a month, helps him sell more homes, which is probably more than a couple thousand dollars extra a month, and as I said, it's now becoming a sustainable business of its own.

So those shifts in perspective can be valuable. Could there be some opportunity in front of you, perhaps, to increase your income, diversify your income, or otherwise expand on what you're already doing? That's my challenge and encouragement for you today. Now, don't forget, inspiration is good, but inspiration with action is better. Today's show notes are at sidehustleschool.com/796.

Guess what? That's for episode 796. 800 is almost here. Thank you so much for listening. I'll be back again tomorrow.

My name is Chris Guillebeau, and this is Side Hustle School. [Music]

From the Onward Project.