Real estate, a commission-driven business, is hard to manage, especially for newbies. Most importantly, money management is considered the trickiest part. In your former job, you must be receiving monthly paychecks, receipts of tax deductions, provident fund calculations, etc.
However, this business is entirely different. Here, you will be working as an independent contractor. Therefore, smart management of money is essential. Let us learn about a few money management tips that will help you excel in this real estate business.
So, here they are:
1. Decide Your Budget
Just like every other business, deciding your budget in real estate is essential. This will help you stay in the right direction. Many new real estate agents overspend in the first few months of their business. When you have a specific budget in mind, you will take steps accordingly. Here are a few things you can do to decide your budget:
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Debt Payment
Try to start with a zero debt policy if possible. It will take away the stress and let you focus more. However, if you have taken a small business loan, calculate its monthly repayment. Now, cut off the amount of this repayment and use the remaining monthly budget for business expenses.
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Safety Cushion
Business experts advise arranging the expenses for the first six months of any business. This is equally important in a real estate business. Do not expect to generate enough revenue during the initial months. Therefore, you should include this expense in your investment.
Also, do not forget to add other additional expenses to your investment amount. For instance, you will require more fuel as you need to travel often. Therefore, your six months car expense will be included in your investment amount.
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Start-Up and Operating Cost
After analyzing all mandatory expenses, you will be getting the exact cost of starting a real estate business. If you are unable to arrange this amount, you can look for financing options. Many easy financing solutions are available for small businesses.
Now, as far as the operating cost is concerned, you can make any changes to it. For instance, if the cost of renting a real estate office is high, which will be a fixed cost, consider online options to start your business.
Similarly, if your marketing expense is high, try going for free online marketing options at the start. You can create your blog, communicate with prospects through social media, join real estate social groups, etc., to advertise your business.
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Create an Emergency Fund
Your emergency fund account should never be zero. We never know when things can go down, and business will suffer. Just like Covid-19 has disrupted the entire economy, any new pandemic can change things in no time. Moreover, you won’t need to borrow money or pay a high interest rate on a credit card if this account is well-maintained.
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Personal Marketing
Decide to dedicate 10% of your earnings to personal marketing. Yes, it’s highly important to market your personality besides your brand. The real estate business is all about trust. Prospects who know you in person are most likely to be your next client.
2. Become a Money Management Pro
Managing money is not simple. Therefore, you need to find out some smart techniques for saving money. Remember, even a small saving can help you make a big difference. Here is how you can manage money professionally:
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Find Ideal Money–Saving Options
Cutting down on luxuries is not the only way to save money; there are many smart options too. For instance, you can opt for calls and data packages to save your expense at the end of the month.
Similarly, you can purchase wrinkle-free clothes and curtains to save the ironing expense. Moreover, you can buy dark-colored office furniture to reduce frequent cleaning and maintenance costs.
3. Keep an Eye on Monthly Expenses
Firstly, maintain a record of whatever you spend in terms of business or personal use. At the end of each month, analyze the total expense. In this way, you will get to know where your money is being spent the most.
Similarly, you will be able to start cutting down a few things in the coming month. For instance, if you are finding it expensive to pay multiple employees for managing the customer data, you can buy real estate CRM to reduce cost and increase efficiency. Likewise, automation in many other aspects can reduce the overall cost in the long run.
- Avail Discounts and Deals
Always be ready to avail of the discounts. It can be a discount on apps, tools, or any real estate training workshop. Availing it at the right time can save good bucks in the future. Furthermore, you can reduce your workforce by getting the right tools and apps. Also, be sure to use the best business management tools for the smart management of your real estate business.
4. Use Money Management Technology
Yes, taking help from technology is mandatory. Here are a few tips to smartly use the money managing tools:
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Make the Most of Free Tools
There are tons of free real estate marketing tools available online. Do not hesitate to use them. Especially if your business is in the initial stage, you can uplift it easily by controlling your marketing budget and using these free options.
Send Pulse, List Reports, Kleard, Real List, Hot Jar, etc., are some of the useful tools for the real estate business. These tools do not directly help in money management, but they are specifically designed to help real estate firms.
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Pick the Best Money Management Tools
You can easily find several tools to manage money easily. Here are a few of them:
- Mint
Mint combines all your spendings, investment, budgeting, and earnings at one platform. Thus, you can view your financial position at a glance. It also assists in getting financial help and notifies when you are over-budgeted.
- Expensify
Here you can maintain a record of both personal and business spendings. It connects with your bank account and asks for daily receipts to maintain a record. Besides this, it allows you to conveniently import receipts by just taking a shot.
- Mvelopes
This free app can connect with four bank accounts and helps in tracking financial records. Additionally, it reveals your spending habit and helps in making financial decisions.
Wrapping it Up
In short, managing money for the real estate business becomes easier when you adopt some smart and useful techniques. So, you should decide on a fixed amount of budget and try to save some money by controlling expenses.
Likewise, you take assistance from the latest business tools to reduce your operational cost. Money management tools are also a must-have for all real estate companies. So, try to bring automation into your process, spend wisely, and save big for your business growth.
