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A popular saying suggests that you must spend money to make money. Still, it’s easy to let your regular costs and expenses get out of hand by justifying them as investments with the view of greater profits. Managing your budget is crucial when running any business, and real estate is no exception. There are many ins and outs and endless expenses whether you’re a homebuyer, a broker, or an agent. Can you make some cutbacks in your daily operations?
Check out these cost-saving strategies to be sure you don’t spend in excess and your business is profitable in the long run.
KEY TAKEAWAYS:
- You will learn about cost-cutting strategies in the real estate business.
- Get plenty of DIY ideas that help you to harness your expenses.
1. Do It Yourself
You shouldn’t feel overwhelmed with all your responsibilities, but adding a few extras to your daily tasks won’t hurt in times of the economic downturn. On the contrary – by taking on some of the work yourself, you may save some serious cash and greatly improve your budget.
What can you do?
- Design your own website.
If your initial reaction was: are you nuts? I am not an IT specialist and don’t know how to code! We hurry with an explanation: you can use a 100% codeless, intuitive website builder, i.e., Placester. The Do It Yourself subscription plan is dedicated to real estate professionals keen on creating their IDX website independently. It doesn’t mean you are left alone: you can contact support anytime, whether you’re troubleshooting issues or looking for marketing advice. There is a 30-day free trial when you can have a go at designing your website. Subscribers get access to over 30 fully customizable templates, researched and designed specifically for the real estate industry.
PRO TIP: A DIY website is a great solution when you are just starting and don’t want to spend too much, as the money is always tight at the beginning. Growing and scaling your business means your DIY website grows with you because you can always reach out to more advanced features in the future, as tools, such as Placester, are scalable.
- Create DIY content
You don’t always need to hire a professional photographer or videomaker. Watch online tutorials to shoot videos on a budget, take loads of photos, and learn from the best. Be inspired by their work and pay attention to how they show angles and perspective to get clear, bright shoots with catchy details. Sometimes necessity is the mother of invention, so you might discover a new passion and talent.
We all know a picture is worth a hundred words, but marketing content is not limited to videos and photography. There are tens of ways to attract potential buyers, and if you are lost for content ideas, you need to look no further than 107 Outside-the-Box Real Estate Marketing Ideas & Tips (With Examples).
- Use free DIY tools and apps
There are tens of different tools you can use for free. Think Canva, Genial.ly, Trello, Starterstory, Lumen5, Animoto, Adobe Creative Cloud Express, HubSpot templates, PlaceIt, Unsplash, Gify, Skitch. The list is not exhaustive. Most paid tools have a free trial or demo version. The “catch” is that you might get access to limited features, but it is better to test them before committing to a subscription.
When something works for you, it is worth considering the annual membership fee or buying in bulk (i.e., using App Sumo). On top of that, most apps offer extra addons or freebies.
The DIY doesn’t mean you work 24/7 doing everything in your business. You don’t want to get burned out, so don’t overwork yourself.
2. Outsource non-core activities
If you are not a one-man army type, consider outsourcing tasks such as bookkeeping, accounting, and marketing services rather than hiring full-time employees. Focus on doing business: saving money and doing everything single-handedly is tempting, but you don’t want to be a Jack of all trades.
PRO TIP: Choose small companies or self-employed freelancers. Many professionals will jump at the chance, especially if you operate locally and want to support your neighborhood community. Cooperation can be mutually beneficial: you share the same group of clients providing services in a set area, so word of mouth is extremely valuable (additional free marketing).
3. Free up your time
Nowadays, time has a price tag – the more time you save, the more you have to grow your business, which means you can potentially make more money. Outsourcing is not limited to cooperation with freelancers. You are an expert in your field, but connecting with specialists can free up your time. Assess your strengths and choose things you are good at or enjoy. Delegate those you lack skills, knowledge, and time, or simply those least satisfying.
- Use automation tools: automate your social media, email marketing, finances, and other tasks to reduce liability and increase efficiency.
- Get the website designed for you. It’s not like we’re forcing you to do one thing (DIY website) and then the other. It’s a matter of prioritizing and time-saving. If you have space to work yourself with an online website builder – honestly, do it. Fair and square. On the other hand, we recommend a Do It For Me (DIFM) plan for those short of time. This Placester solution is dedicated to real estate professionals who want a new real estate website designed for them by experts. You benefit from their experience and don’t risk making mistakes or learning the hard way.
After your website goes live, you can always request content updates and design changes whenever you want. It is also a flexible and scalable choice – when your company grows, your website can grow with you.
- Get your content prepared. Apart from a custom IDX website, some tools can save you even more time. DIFM Content Pro, which Placester offers, includes unique blog and social media content written and published for you. On top of that, you get Google Analytics setup and paid advertising, which can drive more traffic to your real estate website. Again, how much work you are willing to delegate is up to you. Still, it is a comfortable choice to rely on professional expertise and focus yourself on doing business.
- Recruit interns: Juniors and interns are way cheaper and can do much mundane work that would otherwise fall on your shoulders. Remember that time is a rare commodity, and training someone to do the job requires your time. However, it can be a long-term investment.
4. Optimize your marketing and advertising strategies.
- Set a weekly/monthly advertising budget – consider how much you can spend on marketing real estate campaigns or pay-per-click advertisements. Remember that prices might be inflated by the high season (spring is the most expensive time).
- Ensure that part of your marketing budget is set aside for networking, events, printing, and travel expenses.
- Create interesting, quality content that you can use in your paid campaigns. With new realtors on every corner, people won’t click your ads to visit your website unless they see a good value and benefit.
- Track conversion – get friendly with Facebook Business Suit and Google Analytics to see what type of ads inspire current customers and pull in real estate leads.
- Fine-tune ads and prioritize the best channels. Invest in good real estate ads that bring you quality prospects.
5. Embrace technology
Are you always looking forward to the next unveiling of the latest technology, and everybody knows you as tech-savvy? There is a place for technophiles in the real estate market.
- Use digital tools to streamline various tasks and reduce labor costs. There are many open sources or freebies, which should be enough to get you started.
- Get friendly with AI. AI-generated property descriptions and marketing content, improving ad targeting, and managing customer service responses – there are just a few ways you can use, i.e., Chat GPT, in your daily operations.
- Work on the go with a swipe of your smartphone. You can have your real estate business in the palm of your hand if you use tools such as Placester App. Instant notifications, easy collaborations, tracking tasks progress, and content updates. There is no need for some expensive solution that will cost you thousands from day one and then cost again every time you call support. The Placester real estate mobile app allows you to manage your entire website conveniently from your mobile.
- Utilize virtual tours instead of physical ones to save on transportation expenses. The covid-19 pandemic opened a plethora of opportunities for life-streaming services. Can’t your clients make it to an open-door day? Not a problem – offer them a virtual tour with a Q&A.
6. Negotiate lease terms
Rent can be one of your biggest business expenses, so you must carefully review all the necessary payments to avoid future surprises.
- Make sure any increases in base rent and incidentals are clearly specified. Naturally, prices go up, but a rise should be justified and calculated in your budget.
- Don’t be shy about asking for changes. Try negotiating with landlords for lower rent or better lease terms. Many businesses still sign a lease without reviewing it, which is unacceptable.
- Time is important: consider shorter leases or flexible options like subleasing. Ask the landlord for a special deal if you plan long-term rent or inducements.
7. Reduce Maintenance Costs
- Carefully monitor the areas of maintenance and their costs. It makes sense to train a local person for a specific maintenance task than to call a regular company repair company. This significantly reduces maintenance costs.
- Make regular property checks to prevent huge repair bills. Spot little faults, and fix them straight away. It helps to avoid a bigger problem in the future and extends the life of the equipment.
8. Deduce tax
As a realtor, keeping track of your deductions is important to ensure you are not overpaying your taxes. Right knowledge and understanding of tax laws can save you money.
- Make sure you take full advantage of all the deductions. This includes expenses related to marketing, advertising, office rent, equipment purchases, automobile expenses, and brokerage fees.
- Have detailed records of every expense incurred throughout the year to have accurate information for filing your tax returns.
- Keep aside monthly tax money for the final payment, so you don’t need to arrange for finances at the last moment.
- Consider forming an LLC or S corporation, which can provide additional tax benefits. While many real estate agents operate as sole proprietorships, this is not always the best long-term option because it does not protect your personal assets from potential litigation consequences.
9. Weed out unnecessary expenses.
Take a serious look at your budget, especially analyze fixed and recurring costs.
- Review your tools, memberships, and software. Most real estate software pricing is designed to charge you per agent regardless of how many agents on your team use the software. At Placester, you only get billed for agents who launch their websites, so you don’t pay for those just checking it out. And if someone you already paid for becomes inactive, we’ll automatically stop billing your account for that agent.
- Cancel it, sell it, or put it on hold – if you are not currently using something or haven’t used it in the past 3 months.
- Check for any cost overlap – maybe you pay for similar things. If yes, that means you pay double.
- Set an example and curb unnecessary perks. Fringe benefits are a great motivator, but there are other ways to say “well done” or get your team together than a lavish dinner.
- Don’t pay through the nose for the latest technology. Surely an iPhone is great, but do you really need the last one? Opt for a less expensive model of smartphone or laptop instead. You don’t need to spend an arm and a leg on technology just to have something. Being a gadgeteer does not pay off in the time of recession.
- Do you need an IDX website, or can you do without it? There is always a choice, and the fact that you can’t stretch your budget doesn’t mean you must give up your dream site altogether. At Placester, we cater to different sizes of companies, and users, from hyperlocal agents to teams and brokerages.
- Assess your other tangibles: ensure that things you have justify their cost.
Don’t forget about quality when you set off on your cost-cutting quest. In times of slowdown, when you check every penny spent, remember to draw a line where you won’t sacrifice quality. It is one of the biggest mistakes agents can make. Lower your expenses but never standard. The poor value will only repel serious customers, and you will achieve the opposite effect.
