Use the 80/20 Rule to Make More Money in Real Estate This Year (2024)

Time management is essential to success–this isn’t news us anymore. However, the 80/20 Rule brings fresh ideas to time management that you definitely want to pay attention to. You’ll quickly find that there is more money to be made in real estate, and greater success to find, when implementing this strategy in your real estate business.

Using the 80/20 Rule to Make More Money in Real Estate

What is the 80/20 Rule exactly? It’s the idea that 80% of outcomes are driven from 20% of the input or effort in any given situation.

What does this mean for a real estate professional? Making more money in real estate is directly tied to focusing your personal energy on the most high value areas of your business.Delegating the other 80% by hiring out or automating some of your processes is the best way to make this happen. That way, you can spend your personal time and energy on things that bring the most benefit.

The 20% of Your Business That You Personally Should Be Focusing On

There are so many things to focus your attention on when running your own business. Spreading yourself too thin and dealing with them all personally can be a long-term recipe for disaster. Focus your energy on these things, and outsource or automate the rest to thrive this year.

Followup With Already Engaged Leads

Automate your initial lead followup process to ensure that every single lead is contacted quickly and regularly in an authentic way. After that, put in personal effort to followup directly with the leads who respond. This allows you to focus on taking a hands on approach when the interest level is high, while letting the initial contact (which can be incredibly time consuming) get done through your own self built system of campaigns. First, be sure you have at least one campaign in place to engage with new leads. After that, spend time building out campaigns for regular followup until a lead responds. At this point you can take over.

Growth Strategy

Take time to analyze your marketing and growth strategy efforts regularly. Look at what has been working and what hasn’t. Eliminate the things that aren’t paying off, and ramp up what is. This is an ongoing process for all real estate professionals, and something that definitely shouldn’t get swept under the rug if you want to make more money in real estate this year. However, you don’t want to let your time get bogged down here. Just make sure you take stock routinely, then focus even more of your attention on generating and implementing new strategies and ideas.

One-on-One With Clients

Spending one-on-one time with your clients, giving them the attention they deserve, will make it far more likely that they will work with you again in the future. It also makes it more likely that they will refer other friends and family members to you, which contributes to the next area you should be focusing time and energy on personally– your sphere of influence.

Building Sphere of Influence

A strong sphere of influence is essential to building a long-lasting real estate business. Spend time engaging in your local community and building a social media presence. Spend time staying engaged locally. This can be in person or online, and should definitely involve weekly effort on your part. Some ideas include: sending birthday notes or providing valuable resources to other locals within your community. However, it is important to keep in mind that you don’t want to overdo it and quality should always be the focus of anything you share.

Learn more about automating your follow up process today, and check out the Agent Legend blog for more tips to help your real estate business thrive this year.

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Use the 80/20 Rule to Make More Money in Real Estate This Year (2024)


What is the 80-20 rule for realtors? ›

What is the 80/20 Rule exactly? It's the idea that 80% of outcomes are driven from 20% of the input or effort in any given situation. What does this mean for a real estate professional? Making more money in real estate is directly tied to focusing your personal energy on the most high value areas of your business.

What is the 80-20 rule in property investment? ›

InvestNext is a powerful ally for real estate investors seeking to understand and apply “What is the 80 20 rule in real estate.” This principle, which asserts that approximately 80% of outcomes (or outputs) are due to 20% of causes (or inputs), is crucial in the realm of real estate investment.

What is the 80% rule in real estate? ›

When it comes to insuring your home, the 80% rule is an important guideline to keep in mind. This rule suggests you should insure your home for at least 80% of its total replacement cost to avoid penalties for being underinsured.

What are the 80/20 rule real examples? ›

20% of products represent 80% of the revenues of many businesses. 20% of customers account for 80% of the profits of many businesses. 20% of criminals account for 80% of criminal losses. 20% of motorists cause 80% of the accidents.

What is the golden rule in real estate? ›

In November, Corcoran appeared on the BiggerPockets Real Estate Podcast with her son Tom Higgins to describe two methods she says make up her “golden rule” of real estate investing: putting down 20% on an investment property and having tenants of that property paying for the mortgage.

How do you use the 80 20 rule in sales? ›

Applying the Pareto Principle in Your Marketing—the 80/20 Rule
  1. 80% of your sales volume is generated by 20% of your customers.
  2. 80% of your revenues are generated by 20% of your products.
  3. 80% of your complaints come from 20% of your customers.
  4. 80% of your quality control issues involve 20% of your products.
Jun 4, 2021

What is the rule of 20 in real estate? ›

"Possession" requires more than incidental benefit from the public property, but requires actual physical occupation of the property pursuant to rights not granted to the general public; thus, the use of property such as hallways, common areas, and access roads at airports, stadiums, convention centers, or other public ...

Is 80 20 a good investment strategy? ›

The 80/20 rule is a concept suggesting that 80% of your results come from 20% of your efforts. This rule can be used in various contexts; however, investing experts caution against using it in portfolio management.

What is the 80-20 rule in financial planning? ›

The rule requires that you divide after-tax income into two categories: savings and everything else. As long as 20% of your income is used to pay yourself first, you're free to spend the remaining 80% on needs and wants. That's it; no expense categories, no tracking your individual dollars.

What is the number one rule of real estate? ›

For a potential investment to pass the 1% rule, its monthly rent must equal at least 1% of the purchase price. If you want to buy an investment property, the 1% rule can be a helpful tool for finding the right property to achieve your investment goals.

Does the 1% rule in real estate still work? ›

The 1% rule is a guideline real estate investors use to choose viable investment options for their portfolios. Although the rule has helped many investors make wise decisions regarding their investment properties, the current real estate market may make following the 1% rule unrealistic.

What is the 25 rule in real estate? ›

To calculate how much house you can afford based on your salary, use the 25% rule—never spend more than 25% of your monthly take-home pay (after tax) on monthly mortgage payments. That includes your mortgage principal, interest, property taxes, home insurance, PMI and HOA fees.

What are the flaws of the 80-20 rule? ›

Disadvantages of using the 80/20 rule

The 20 and 80% numbers don't refer to the amount of effort you're putting in, but the causes and consequences you're working on. The goal is not to minimize the amount of effort, but to focus your effort on a specific portion of work to create a bigger impact.

What is the 80-20 rule in simple terms? ›

Simply put, the 80/20 rule states that the relationship between input and output is rarely, if ever, balanced. When applied to work, it means that approximately 20 percent of your efforts produce 80 percent of the results.

What is an example of the 80-20 rule for productivity? ›

80/20 - How to Increase Your Productivity by Doing Less
  • ~20% of seeds planted result in 80% of the flowers.
  • ~20% of the world has ~80% of the wealth.
  • ~20% of occupational safety hazards lead to ~80% of the injuries.
  • You wear ~20% of your clothes ~80% of the time.

What is the 5 2 rule in real estate? ›

During the 5 years before you sell your home, you must have at least: 2 years of ownership and. 2 years of use as a primary residence.

What is the 10 to 1 rule in real estate? ›

The 1 and 10 rule is another real estate investment guideline that suggests that investors should aim for a gross monthly rent that is at least 1% of the property's purchase price and a net profit margin of at least 10%.

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