When you work at a typical job, your employer pays you each week, takes out taxes and other deductions for you. But when you become a real estate agent it becomes your responsibility to keep track of the money you make and budget your money effectively. You may be a wonderful real estate agent but unless you know the basics of money management and budgeting, your real estate business may suffer. You don't need a degree in accounting to keep up with your budget, you just need to be consistent and develop a method which works for you to keep track of expenses and profits.
The Basics Debt reduction and a safety cushion: Try to be as debt free as you can be before you strike out on your own. If you don't have creditors and monthly bills breathing down you neck, you'll be able to focus on the business of real estate and not just making as money as you can. You also need a safety cushion for slow times. It is recommended by industry experts to have enough saved up to cover expenses for three to six months. Most experts also recommend you have an extra 10% squirreled away in your safety cushion for advertising, web site maintenance, and marketing expenses. Setting aside a business reserve for unexpected expenses is also another good real estate business safeguard. This can be a small as $100 a month or more.
Know what you're spending: In order to know how your real estate business is doing, you need to know how much you're spending. Keep track of all your expenses. Create a log to account for everything you spend for the month. This will help you to see where your money is going. You may be shocked to find out you're paying $300 on mocha lattes. Include all of your real estate business expenses. This includes gas, office supplies, marketing, and anything which has to do with your business.
Calculate your income backwards: If you want to make $50,000 a year, figure out how much you need to make each week or each month. This will give you a goal to work towards. If you have a slow month, then you know you need to make it up the next month to meet your income expectations.
Get creative: Look for easy ways to make your money go farther. For example get a cell plan with unlimited minutes, ask for a higher deductible on your car insurance, and other ways to save money. Take advantage of industry discounts. If you are a member of an association ask about discounts for insurance, products, marketing and technology.
These tips are some basic tips to help you manage your money in your real estate business. As you gain experience you will pick up more ways to budget your money and become an expert at money management.
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Helping You Create Wealth Through Real Estate In Rochester, NY, I've bought, sold and represented hundreds of transactions, yielding hundreds of thousands of dollars in profit. Feel free to always contact me directly at 585-455-3352 or by email at ginny@ginnynorris.com. You can also go to http://ginnynorris.com/contact-ginny/ to fill out the form and I will be in touch with you.
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