In the words of iconic New York actor and artist Clifford Smith Jr., “Cash rules everything around me.” While you might have an amazing vision and lots of great business strategies, all of your long-term plans won’t matter much if you don’t have the money to sustain them. In real estate, you are making independent decisions daily on where to expend your limited financial resources.
For people who struggle with short-term cash flow, or for anyone trying to streamline their business, there are almost certainly areas where you are overspending. Conversely, for the thrifty agent who is sitting on a nice nest egg, there are ways that money could be working for you and your business.
Here are three expenses you are likely spending too much money on, and three where you can spend more.
Spend Less: Marketing
Agents are almost unanimous in saying that the best kind of marketing is word of mouth—and that is free, or should be free. While marketing is incredibly important, the sections of your funnel that involve SEO blogs or highway billboards are not as important as other, cheaper elements. The specifics will differ by agent, region and speciality, but redirecting resources from high-cost outbound channels to more targeted elements that will get people talking about you can save a lot of money.
Spend More: Your car
If you are a real estate agent and you aren’t half-living out of your car, are you really an agent? For something that is both a huge asset and a huge liability, vehicles are not valued as much as they should be by agents. Even if you aren’t trying to transform your car into a mobile command center or cover it with custom decals, you should spend money now on maintenance to make sure you don’t spend more later on costly repairs—or worse, lose out on a deal when you break down. If fuel has become a major financial headache, potentially consider a more efficient vehicle as well, which will pay for itself in the long run.
Spend Less: Technology
There are likely 25 different proptech startups in your inbox right now that would disagree with this, urging you to sign up for the latest AI-powered automated super software. But while different agents are more or less dependent on technology, you almost certainly don’t need every specialized piece of tech that your broker offers. Even when looking at tools that are extremely useful, there are often commercially available alternatives—either free or cheap—that can effectively serve the same function.
Spend More: Local vendors/services
Especially as a listing agent, you want to make sure you aren’t contracting with cut-rate amateurs for things like staging, photography or printing. The work these people do directly reflects on you—not just during the transaction, but far beyond. Your seller will remember sloppy or unprofessional listing photos long after their home sells, and buyers won’t forget the unprofessional movers you recommended when they decide to sell. Spend the extra money (and time) to ensure anyone you work with leaves just as positive an impression on your client as you do.
Spend Less: Gadgets
This isn’t to say you should never spend money on unique, interesting tools that have obvious utility to your business. But many people are throwing money at every new shiny object, or replacing their tools every time a new version comes out. Be thoughtful about what is actually useful, and pick something that is built to last rather than engaging in “retail therapy” every time you log into Amazon. If it works, you don’t necessarily need to replace it, and not every smart device is an intelligent use of your funds.
Spend More: Clothes and cosmetics
Like it or not, you are going to be judged constantly by your appearance in this business. While most agents likely have an extensive wardrobe, it truly is worthwhile to make sure you are able to dress in a way that demonstrates your success and professionalism in every season and every scenario. And while you certainly don’t have to wear makeup to look professional, if you do choose to use it, spending extra money (and time) can make a big difference. You might not be the kind of person who wants to think about money all the time. But you simply can’t make it in this business without revisiting your regular budget and expenditures on some kind of regular basis. While the larger forces of the industry may be pushing you toward investing in one aspect of your business or another, you need to ensure that your needs and goals are driving these decisions.