As a business, the best way to stay afloat is to manage your resources smarter. Being short on cash and time is not that big of a problem if you know where it’s worth spending and where you should tighten up things a bit.
The big problem with saving money is not in making cuts. It’s in knowing where you can do it safely.
Imagine your business as a house with a leaking roof. You can save money by not fixing the roof, but what happens after the next rain? Your ceiling is ruined, and so is your furniture and flooring.
The same thing goes with saving time. You can eliminate any task, and this will save you a lot of time. However, this would be like trying to save time by not cleaning your home. Sooner or later, you’ll be caught up with the consequences of your actions.
So, what are the actual safe ways to save time and money when you’re in the real estate business? Here are some suggestions you should consider!
Hire virtual assistants
One of the best ways to improve the productivity and cost-effectiveness of your operations would be to hire a real estate virtual assistant to help you out. Hiring virtual assistants over regular employees gives you more flexibility, with virtually (no pun intended) no downsides.
This is also about being more efficient with your time. Just think about it: you, as a professional, could ascribe an hourly wage to your work. Just think about it this way: if you were to hire someone with your particular set of skills and experience, how much would you have to pay them per hour?
The problem is that when you’re paying a specialist, you’re paying them a fixed amount of money per hour, regardless of what they do. Imagine running a hospital and hiring a surgeon. You’re paying them the same amount for an hour, regardless of whether they’re making their own coffee, responding to emails, or actually performing surgery.
The same thing goes for real estate professionals. You’re paying them top dollar to check listings, respond to emails, and run social media accounts, something that a virtual assistant could do.
It’s not just that they’re doing these things; it’s also about what they’re not doing because of it. The list of tasks that you need a specialist for is virtually endless, and having them stuck on administrative tasks is really not the way to go.
Audit your marketing
Figuring out how efficient your marketing is and how to adjust your marketing spending is arguably the most important thing in the world when you’re in real estate. The stronger your marketing is, the more people will reach out to you. Keep in mind that we mentioned adjusting. When just trying to save money, marketing is not where you cut investment.
One of the best ways to do this is to start by revising the profile of your average buyer and trying to figure out where they’re the most likely to engage. Just think about homeownership in general and the neighborhood where the properties you’re selling are located. Who can afford them? Who’s moving in?
If it’s a predominantly older demographic, is there really a point in overspending on TikTok content and ads? You would probably do better on Facebook.
Now, this is just one example of how, by reevaluating your social media marketing strategy, you can find a way to redistribute your funds better or even find where you can make cuts to cause as little trouble for your business as possible.
Even if you don’t plan to make cuts, this is a way to help you use your marketing budget more efficiently. This way, you’ll invest in ideas that actually give results.
Increase your cash reserve
The biggest problem with the real estate industry is the fact that your profit is unpredictable. You’ll get a huge share of profit when you sell a place, but you have no idea how many places you’ll be able to sell in a month. This part is completely unpredictable, and making financial projections is difficult.
This is why, when you actually have the money, you might want to set it aside and make a bigger cash reserve. This way, you can give your cash flow a huge boost.
How does that save you time and money?
First of all, it won’t make you desperate to sell, going below the reasonable price and losing money. Second, it will free your time and mental capacity. You won’t be under pressure, which will impede your working capacity.
You’ll also spend time trying to get the funds you need in a suboptimal way. Sure, creating a passive source of income is an amazing safety net for a business, but it will take time before this can actually boost your income.
This means that having a healthy cash reserve actually saves you from having to get loans or quickly sell assets.
Find a way to reduce your taxes
First of all, it’s worth pointing out that we’re in no way suggesting tax evasion or anything of the sort.
Instead, you could do something simple like restructuring your realtor business. For instance, switching from an LLC to an S corporation might affect the amount of money you pay in taxes. The same goes for being an independent contractor.
The change will not always be for the better, which is why contacting a CPA or a financial expert might be the best way to set out on this path. Just ask them for some tips and deductions. Their assistance will be especially needed if you intend to expand internationally or work in separate jurisdictions.
Wrap up
Ultimately, you either want to do the same with smaller resources or do more with the same resources. This is the only compromise that you have the privilege of making in the real estate industry, and everything else would put you in a pretty bad situation in the long run. You can’t save money on home inspection and presentation, which means that you need to be more efficient with recruiting and marketing. Also, try to leave more money aside.
