To achieve long-lasting success in real estate, it’s essential to get your finances in order. Check out these five key strategies to achieve financial success in real estate!
1. Create a Budget
Although this seems obvious, a recent survey found 65% of Americans didn’t know how much they spent the previous month. Create a spending plan for your business that has line items for income and outgoing expenses like marketing, lead generation, real estate CRM software and more.
2. ABC Your Expenses
Once the expenses are tallied up in your budget, prioritize them so you know how to divide up your cash. Fixed expenses are the most important — these are costs you can’t do much about, like your mortgage, insurance, utilities, etc. Next, take a look at irregular expenses like grocery bills, cable and other costs you could potentially reduce. Last, check on your discretionary spending like recreation, dinners out and other things you don’t necessarily need.
3. Pay Yourself First
To run a sustainable business, you must pay yourself first. Give yourself a consistent salary, just like in the corporate world. This allows you to establish steady cash flow to ensure financial security in your personal and business life.
4. Give Yourself a Bonus
If you end up making more one month, instead of giving yourself a raise, pay yourself a bonus! You might do this quarterly or yearly depending on your earnings. Look for productive ways to spend your bonus, like investing in retirement or stocks, paying off debt or funding your reserves.
5. Separate Your Accounts
Keep business and personal accounts separate. Set up an account and credit card for your business, and use them for professional expenses only. Everything else — including your salary — should go into your personal account. Consider opening a third account to fund your taxes.
Mastering your finances is critical to your success as a real estate agent. If you want to build a profitable business that withstands the test of time, set yourself up with a strong financial foundation.
For more next-level financial strategies, check out The Pathway to Mastery®—Advanced, an eight-week real estate training program that teaches agents how to manage their money for a business that thrives long-term. Register for this real estate training course today!