Christy Murdock Edgar, a realtor and consultant, recently published a financial timeline for new agents in InmanNews. Though her focus is on new agents, we here at Tim and Julie Real Estate Coaching think there are many points in this financial timeline that could be applicable to veteran agents as well, particularly in this “cooling” or “slowing” market where closings may be fewer and farther between. Take a look, everyone.
Month One – Planning and Initial Expenses
- Jennifer Birchett, a principal wealth advisor with TrueWealth, (and Tim and Julie Harris) recommends having an emergency savings fund equaling at least six months of absolute, must-pay expenses.
- Birchett also recommends making a full-time commitment to real estate while making a former or other job a part-time side-hustle to cover a steady income for necessary living expenses until the real estate effort kicks in to cover those expenses.
- Minimum upfront expenses for real estate include business cards, license fees and brokerage fees when signing up to work with a company.
- If choosing to become a listing agent out of the gate, check with the brokerage firm to see if it or you provides for the listing sign on the property.
Month Two – Budgeting and Tax Planning
- Everyone needs a budget and everyone needs to stick to a budget.
- Track your expenses…daily.
- Reduce non-essential daily spending by drinking your own coffee, eating at home more, canceling cable services, etc.
- Birchett recommends Mint as a financial management app (there are others) to help you track your business expenses…daily.
- Items/expenses to track include mileage, marketing and promotional materials, food for open houses, business gifts/compensations for referrals, subscriptions, license fees, continuing education, health insurance premiums if not on a spouse’s health insurance plan.
- ALL business expenses are deductible!
Month Three – Your First Commission – CONGRATULATIONS!!!M
- Amber Tkaczuk of Nebraska Realty advises, “Don’t forget about taxes once you do get paid. Set aside at least 30%.”
- Tkaczuk suggests planning your yearly sales goals around a certain level of income that MUST include your non-disposable income of taxes, fees, supplies, marketing, etc.
- Birchett agrees. “The real estate business is cyclical; you could have fewer closings from one month to the next. Early on, limit your spending to the essentials.”
Month Four – Marketing and Promotional Work
- Initial promotional work is likely to support your following up with leads given to you by your broker and cultivating your sphere of influence.
- Tkaczuk suggests:
- Putting together an Excel spreadsheet with names and contact information.
- Setting aside some money to send notes to people and/or pop-bys to get and keep your name on the tip of peoples’ tongues when they talk real estate.
- Use social media – it’s cost effective.
- Looking at Canva, a graphic design platform, to help you create your business branding ideas, logo, color schemes, etc.
Month Five – Re-Evaluating Your Budget
- What’s working and what isn’t?
- If you have any money left over, spend it on what is working or what you think will work such as coaching, promotional materials, branding, marketing, etc.
- Everything that does or will work is tax deductible. Forget the rest.
Month Six – Bootstrap Your Digital Footprint
- Check out Word Press’s free platform if you’re digitally literate.
- Check out Wix if you need a little help. Approximate monthly fee is $13.
- Blogging and creating a YouTube channel are free. Do each consistently.