20 Sep Top 4 Real Estate Agency Business Expenses
Whether you’re running a small brokerage or working as an independent realtor, real estate agency business expenses add up quickly. These high costs can erode your bottom line and serve as a barrier to innovation. Taking advantage of real estate agent business loans can position you to overcome financial limitations and foster growth.
1. Operational Costs
From the cost of maintaining business phone services to fees associated with open houses, day-to-day operational expenses can add up. This is especially true as technology begins to play a larger role in the real estate industry. Which pushes realtors to engage in new strategies to leverage digital solutions in everyday work.
Some real estate brokers may use business operational financing to get a quick injection of cash to cover essential daily expenses. For example, if a slow sales period leaves you struggling to pay the bills, a short-term working capital loan can help you keep your business moving.
2. Advertising Costs
Advertising yourself and your properties is essential to retain and grow your customer base. However, advertising is one of the costliest real estate agency business expenses. The first step in real estate advertising is to create and manage a professional website. A study from the National Association of Realtors found that 44 percent of home buyers look for properties online as their first step. Another 13 percent start the process by researching home-buying procedures online. Comparatively, just 17 percent begin by directly contacting a real estate agent.
While you’ll also want to invest in traditional advertising, digital mediums are starting to dominate the real estate space. Obtaining a business loan to fund a digital marketing campaign can help you reach a larger audience by focusing your marketing strategies on web, social, and mobile channels.
3. Transportation Costs
According to the latest survey from the National Association of Realtors, real estate agents put a collective 3.6 billion miles on their cars each year as they shuttle clients to various properties. The same survey found that the average real estate professional spends $1,310 annually on vehicle expenses. Transportation costs add up as you pay for gas, maintain your automobile, and work to ensure you are always available for clients and potential buyers.
4. Licensing and Education Fees
Continuing education is critical in the real estate sector. Agents not only have to maintain their licensure but also stay on top of regulatory industry issues. A Real Estate Express report identified this as a primary expense facing realtors, as it requires a combination of time spent in pre-licensing education and a variety of fees depending on the type of exam, licensing, and training.
How Funding Can Help with Real Estate Agency Business Expenses
Relators experience levels of success and flexibility that aren’t available in other industries. However, working as a realtor comes with high costs and sudden cash flow issues that arise due to the housing market. Experiencing cash flow lulls can make it difficult to maintain operations and focus on growth.
Luckily, there are financing options available to help with real estate agency business expenses. Having working capital on-hand ensures that your real estate business doesn’t get bogged down due to sudden cash shortages. Obtaining funding, such as short term business loans online, can help you tackle some of the high costs that come with running an agency, making it easier to sustain consistent growth and stand apart from the competition.