3 Tips for Agents to Make Their Budget and Cash Flow Align

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There are many reasons to explain why 87% of real estate agents fail, but not being able to manage their budget and cash flow has to be among them. Here’s how to approach your spending so your money ends up making you more of the green stuff.


Video Transcription

NAR reports that 87% of Realtors® are failing within the first five years. There are many reasons to explain this dismal number, but not being able to manage their budget and cash flow has to be among them. Many agents likely don’t understand just how powerful a budget is in helping them know what’s working and what’s not. Here are my three tips to harness the utility of tracking your expenses and income.

Tip #1. Create a budget and stick to it

The obvious first step is to create a budget. Simple, right? The next step is to stay true to your limits. Don’t spend money you don’t have, thinking that you’ll make it up down the road. Be especially careful about watching what you put on your credit card. Be disciplined about your spending.

Tip #2. Lead with revenue

When you do spend money, make sure you’re not throwing good money after bad. Has spending $X on Y made you at least $X back? Also, don’t spend money unless you’re making money. Gary Keller, author of the Millionaire Real Estate Agent, observes that agents tend to think that if they just keep spending a bunch of money on listings, buyers are going to rain from the sky. You need to guide your budget by leading with revenue because everybody is going to want to sell you the next great thing in tech, automation, software, or something else, and it is going to be tempting to grab at every shiny object. If you don’t stick to your budget and lead with revenue, you will eventually fail.

Tip #3. Perform regular audits

My third tip is to audit your money and hold it accountable to results. I’m talking about tracking every nickel of your operating expenses—the paper you use to print out your contracts, the ink for the printer, the paper shredder, the lubricant for the shredder—tie it all back either directly or indirectly to your results to understand how your expenses contribute to closing a deal.

The takeaway

So many agents are failing within the first five years because, at least in part, they’re not applying these habits to their budget and cash flow. If you like these tips subscribe to our YouTube channel, and check us out on Instagram and Facebook, but most importantly take action on this today!

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