I’ve learned a lot of things in the 20+ years I’ve been in real estate. Many of my lessons in the school of real estate hard knocks have had to do with money.
To help save you from some of those same hard knock headaches, I’ll share some information about money in the real estate game and how it works, or doesn’t, when you’re an aspiring realtor.
Nothing Is Certain
First, realizing that the real estate market is unpredictable and can change quickly is essential. Second, it’s important to be prepared for price fluctuations – up and down – as well as commissions and closing costs.
The beginning of your real estate journey will probably feel expensive and frustrating, even if you get lucky a few times. But money isn’t everything, so don’t get discouraged if you’re not making much of it at first. However, money isn’t nothing either, so start taking it to heart that your time isn’t free. Make sure that you’re actively working toward a goal where you can pay yourself first. You can do a few things to start working on that goal right now.
Get It Together
As a new realtor, you are probably very excited to get your business up and running. However, it is part of the realtor’s journey to remember that you must accurately track your expenses and income to be successful. This can be done quickly with an organized system. With tracking, you can see where you are making money and where you need to make changes. Additionally, it will help you stay on top of your taxes and keep your business in the black.
You can ensure that your real estate business is successful with a little organization! You can then track your expenses, such as advertising, closing costs, licensing fees, and income, so you can stay on top of your finances. There are many different ways to track your expenses and income, so find one that works best for you and stick with it.
Get a Plan
To start, you can figure out what you want your salary to be in 5 or 10 years and work towards that goal. When you’re ready to get down to the nitty-gritty, you can start redefining what you want to save for retirement, create a better budget, and invest in your business and other opportunities.
One of the biggest reasons new agents fail is that they don’t have a solid financial plan. They spend all their money on marketing and then run out of funds when they need it most. Learn more about the MJ Network red light/ green light strategy to better allocate funds for your first year in real estate.
Get a Budget
Creating a budget is also essential for any businessperson, but it’s significant for realtors. Without a budget, you’ll quickly find yourself in debt and struggling to make ends meet. Networking is essential, but it’s also the quickest way to overspend if you don’t have a clear budget.
A budget also ensures that you have the structure to save for retirement. Many new agents forget about this step and end up working until they’re too old to do so. Let’s not do that! A retirement fund will allow you to quit your job when you’re ready and still have money to live on.
Get Ahead
One of the most serious investments new realtors can make is in themselves. They need to be willing to learn as much as possible about the industry and how to be successful. Attending seminars, webinars, and other educational events will help them gain the necessary knowledge.
In addition to investing in their education, new realtors also need to invest in their professional development. This includes marketing themselves effectively, having a solid online presence, and networking with other professionals in the industry. New realtors must invest in themselves by attending continuing education courses and seminars. Continuing your education in some way or another will help you make more money as a real estate agent now and in the future. Making investments in yourself can be costly, but they are well worth it in the long run.
Get Tips
Plenty of people are willing to give advice when it comes to money – both paid and for free. New realtors can often feel lost and unsure of what to do when it comes to money matters. This is where seeking advice from more experienced colleagues can be highly beneficial. By getting tips and pointers from those who have been in the business for a while, new realtors can save time, money, and hassle.
Remember that real estate financial success requires a lot of hard work, dedication, and most importantly, money. The people you ask for advice from will have spent their fair share of Franklins on advice, supplies, education, marketing, and mistakes. Advice from established mentors or just those who have been successful in the business is bountiful but be respectful of their time because it is, after all, their money.
Get the Real Truth
Here it is: real estate won’t be as easy as you thought – at least, not at first. It takes dedication and perseverance to be successful and even more so to be successful with your money and manage your finances in this field. You can’t just grab a license and expect to sell a house daily and live off your riches. Still, it is fulfilling, and the experience can be very lucrative if you work at it. Be sure to save money for expenses and retirement as a matter of practice before investing back in your business and before spending.
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The More You Know