Earning a living in real estate is far different from being an employee. You not only “get” to be your own boss, you get to take care of your own business expenses.
The largest, of course, is tax. If in the U.S., you must allow about 15% for Self-employment Social Security and Medicare, and then anywhere from 15% up for State and Federal income taxes – depending upon your overall household income. I advise deducting that much from each check and stashing it in a savings account.
To reduce that tax liability, consult your tax advisor for a list of allowable deductions and begin recording all deductible expenses as soon as you begin your career.
After that, marketing and self-promotion vies for the #2 expense with your automobile. Budget for gasoline – and also for regular maintenance, tires, and the eventual replacement of the car itself.
Your marketing budget should include the initial expense of setting up your web site, divided over 12 or 24 months. This was money out of your pocket and you should “pay yourself back” from commissions earned. But even if you need to borrow a bit to get it done, you should have a web site.
According to NAR, over 80% of all buyers look at the internet before they visit a Realtor. Informal polling says that sellers also look at the internet – to find the Realtor who does the best job promoting their listings.
Buying a domain name and setting up your page is relatively inexpensive, but do budget in your monthly hosting expense.
Depending upon your own expertise in writing copy that will grab both your visitors and the search engines, a good part of this expense will be engaging the services of a copywriter. Don’t scrimp on your website, because your web site will be the first impression that many prospects have of you.
At the same time, don’t go overboard. Graphics and color are pretty, but they sometimes confuse the issue. The purpose of your site is to show visitors why they need to call you for real estate – not to show your artistic side.
So you don’t need to pay for expensive web design, and while you should shy away from a $10 per page writer, you also don’t need to pay several thousand dollars per page for your copy. Shop copywriter websites, look at samples, and make an informed decision.
Choose writer with a conversational tone that sounds like you. Too much slang sounds immature and unprofessional, but you sure don’t need Miss Picklefeather’s proper grammar.
After that, be sure to allow for replenishing your business cards and personal brochures, postage and printing for your regular mailings to your sphere of influence and prospecting list, plus postage and printing for thank you cards, just listed cards, greeting cards, etc.
Your newsletter:
In my opinion, after the web site, your newsletter is your most valuable marketing device. It keeps you on your prospects minds by giving them valuable or interesting information, thus establishing you as the expert in your market. Because it gives good content, it is read rather than “tossed on arrival.”
Of equal importance are the thank you cards you should be sending daily. These make you stand out from the crowd and create a warm feeling in your recipients. What better way to make people think of you in a positive light?
Print advertising:
You may feel that you need to do print advertising because your competitors are doing it. I seriously doubt it.
A full page in a Homes magazine is expensive, so if you do it, keep track of the results and discontinue if there are none. You really don’t have to be there just because other people are. If you think you must have a presence, see if you can share a page with other agents.
Your local newspaper may or may not be a good place to advertise. Again, testing is the key. But I firmly believe that you should use “article advertising” rather than block ads that essentially say “I’m a Realtor and I need your business, so call me.” Your articles don’t need to be long, just informative and useful.
Find out the cost of a decent sized ad and put it in your budget. But if you don’t get results, discontinue and use that money somewhere else – such as in expanding your newsletter recipient list.
Miscellaneous expenses:
Even if your office supplies your yard signs, allow money to invest in sign riders with your name on them. If the office doesn’t supply brochure boxes and printing for your house flyers, add them to your budget, because they’re important.
Depending upon your former career, you may need to add to your wardrobe. Put it in the budget and do it slowly. Remember, your clients don’t see you every day, so you don’t need a new outfit for every day of the month. New shoes really aren’t part of marketing unless all your old ones are sneakers. A good blazer might be, because it will convey a professional image.
You’ll definitely need a cell phone – clients expect to be able to find you even when you’re out showing or sitting down to lunch. Try to find a plan with unlimited minutes so you can make those expensive long distance calls from your cell phone.
And speaking of lunch, allow room in your budget to take your clients to lunch if you’ve schedule a full day of showing. Hopefully, you’ll be able to tell which clients are worth the investment and which are just using you as a tour guide. Sad but true, some do. Some even visit Realtors and look at homes or property as a hobby.
Prepare your budget, keep track of your marketing return on investment, and adjust your spending accordingly. One of the biggest mistakes any business can make is in failing to see where their customers are coming from and continuing to throw money away on marketing with no return on investment.
Marte Cliff is a Freelance Copywriter and former real estate broker who specializes in writing for real estate and related industries.
Marte offers a 6-month Career Builder Program for Realtors at http://www.promotemyrealestatecareer.com Each lesson comes with an assignment to lead the beginning Realtor into success. While geared toward marketing, the Program also offers insight into customer relations and sound selling techniques.
For Realtors who are ready for aggressive marketing, she offers web copywriting and lead generation packages at http://www.copybymarte.com
Marte’s weekly ezine for real estate professionals offers tips and hints for building a successful business. To subscribe, and get a copy of her report: How to Get Referrals & Testimonials, visit her at http://www.marte-cliff.com
