During the current market slowdown, you need to learn 10 tips for saving money as a Realtor.
Protect your nest egg using our tips below.
KEY TAKEAWAYS
Our 10 tips for saving money as a Realtor help you to:
- Re-evaluate your spending habits;
- Show ways to increase your cash reserves;
- Find ways to reduce your taxes;
- Re-evaluate your investments;
- Create specialized savings accounts;
- Create a budget;
- Finding a real estate industry side hustle;
- Finding a new real estate niche;
- Educating yourself in ways to save money; and
- Joining a 100% commission brokerage to keep everything you earn.
10 Tips For Saving Money As a Realtor
Feeling jittery about our national economic downturn? The National Association of REALTORS® (NAR) warns members about the current housing correction negatively affecting Realtors.
Alignable, an online network for small business owners conducted a poll last November. It revealed that 37% of agents struggled to pay rent for their offices. It also showed that 60% of our nation’s consumers who responded are now living paycheck to paycheck.
Here are 10 tips from financial experts on how to save money.
1. Reconsider Your Spending Habits
Examine your expenses to seek ways to eliminate or reduce them. When cash flow is limited it’s time to look at your non-essential expenses. For example, pricey extra cable TV channels, club memberships, and your daily expensive latte.
Look at your homeowners and vehicle insurance and check out alternative companies with lower prices. You could save $1,000 or more by switching insurance companies, grouping policies, and cutting out extra policy coverages.
In essence, if you lack six months’ worth of savings you need to cut at least $1,000 a month in personal expenses. Stop gym memberships, dining out, and buying expensive cuts of meat, fine wines, and clothes.
Tip: Check out AmericaSaves.org to find ways to save more money.
2. Increase Your Reserves
The Tree City Advisors site suggests putting enough cash in a savings account as a reserve to cover at least six months of expenses.
This means selling art objects, jewelry, expensive furniture, and other non-essential items. It’s better to sell them now and put the money in the bank instead of waiting and being forced to make “fire sales” at reduced prices. Or, quickly selling items at a pawn shop.
3. Find Ways to Reduce Taxes
Consult with a CPA or other qualified tax expert to see if you are taking every tax deduction. You might not know all your business tax deductions or homeownership and children’s deductions.
Restructuring your Realtor business to save on taxes may result in saving $thousands. Compare self-employment income with an LLC or an S Corporation. A good tax plan can save you lots of money.
Tip: Independent contractors usually pay 50% more in taxes than if they used a legal entity like a corporation or an LLC.
4. Where Are You Investing Money?
Re-evaluate your investments. Add up all your accounts like investments, checking, savings, and retirement. Look to see what can convert to cash in the next three years.
For instance, stocks require long-term growth and become too volatile during a downturn economy.
Tip: It might make more sense to convert some into “cash-like” investments like a CD, short-term government bonds, or a money market.
5. Consider Specialized Savings Accounts
Open multiple individual savings accounts. Label some for emergencies, business expenses, taxes, and retirement.
Allocate commission checks to separate bank accounts. For example, one for taxes, and another for business expenses, or living expenses.
Tip: This system keeps you organized and ready for any emergencies.
6. Create a Budget
If you don’t have one, now is a good time to create a budget. Too many people become disorganized and lose control of their spending habits whether business or personal.
Estimating your earnings and expenses puts things into perspective. You need to create a complete list item by item. Track how they do. Modify them as needed.
Want help with creating a budget? NAR has your back with its Center for REALTOR® Financial Wellness. It includes tips and spreadsheet templates to help you.
Budgeting Apps recommended by Nerd Wallet for 2023 include:
- Mint.com gives you a personal finance app to download to organize and track all your accounts for Free;
- YNAB for a zero-based budgeting system that forces you to plan for every dollar you earn;
- EveryDollar offers a simpler zero-based budget plan than YNAB;
- Goodbudget helps you plan your finances more than tracking called an envelope budgeting system lets you set up specific categories for your monthly spending categories (envelopes); and
- PocketGuard is a simple way to connect your bank accounts, credit cards, investments, and loans to track bills. The app shows you what’s left after you set aside funds for bills and necessities.
7. Consider a Side Hustle
Supplement your income with a side hustle. Realtors possess skills useful in other real estate professions. The following list only provides the requirements not already included with your real estate license:
- Home Stager who stages homes for other Realtors and sellers;
- Notary Public in California must be a state resident, complete state-required courses, pass a written exam, and clear a background check;
- Property Manager in California requires getting a state Property Manager Certificate; and
- Appraiser in California requires state-approved courses specifically about property appraisals, pass the appraiser’s courses exam, apply for your state appraisal license & pass its exam, and work 2,000 hours as a real estate appraiser trainee.
8. Find a New Niche
When the real estate market takes a downward turn, sales agents look for other niches. Ask yourself this question: Which real estate industries thrive during a downturn?
Here is a list with links to real estate niches that thrive during a downturn:
- “How Real Estate Agents Get Paid from Foreclosures” since foreclosures increase during slow markets;
- ”Become a Probate Real Estate Agent” as people pass away and heirs need to sell to pay estate taxes even during a downturn; and
- “How Real Estate Agents Help Investors” where investors flourish when sellers lower prices and hold on until the market recovers.
9. Educate Yourself on Ways to Save Money
You can never stop learning. In the past, we published several articles about making money and savings tips for Realtors and real estate agents like:
- “6 Top Things Real Estate Agents Must Do To Succeed in 2023”;
- “7 Best Ways to Be a Productive Real Estate Agent”
- “Tips For Making More Money As A Realtor”; and
- “Key Ingredients to Become More Successful in Real Estate”.
10. Join a 100% Commission Brokerage
Isn’t keeping 100% of your commissions better than splitting with a broker and only earning 80%, 70%, or 50%?
Tip: Newly licensed agents need more education and experience to feel comfortable. Yet, once you do it’s better to earn 100% commissions.
Warning: As you research and interview 100% brokerages you will find they charge many fees to profit. Association fees, desk fees, administration fees, transaction fees, etc. add up fast. Then, some brokers charge “hidden” fees that you won’t know about until you must pay them.
Tip: Cut costs by avoiding 100% brokerages with hidden or too many fees. Yes, there are some 100% brokers with no hidden fees with reasonable costs for the few fees they charge.
Learn: We published a recent article for new real estate agents showing how to start their businesses with cost savings tips. It’s filled with helpful pointers. Also, 9 steps for starting your real estate agent business.
View our article titled: “How Realtors Earn 100% Commissions For $50 a Month”
That’s right. We have three payment plans including one for only $50 a month!
Want to Join the Best 100% Commission Real Estate Brokerage in San Diego?
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Top 50 in the U.S.: Big Block Realty is also recognized as the 49th Best Independent Real Estate Brokerage in the U.S. in 2022 out of 106,000 real estate brokerages by
The Wall Street Journal partnering with Real Trends Rankings.
Big Block Realty offers fully transparent (no hidden) fees to our 100% Realtors.
Join Us along with over 1,000 other San Diego area and other parts of California Realtors as we offer complete transparent 100% Commission Plans with no hidden fees.
We also include Free:
Steven Rich, MBA – Guest Blogger
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