Managing cash flow as a real estate agent can be difficult, because of the commission-based nature of the work. It’s not like getting a steady paycheck, and that can make it stressful for people if they are worried about their bills being paid on time or the level of savings they have in the bank.
What Does It Actually Mean To Manage Your Cashflow As A Realtor
Creating a predictable pattern of income and expenses for your business allows you to prevent a struggle with anxiety & financial hardship with careful planning.
Fortunately, there are plenty of options to consider that will allow for better cash flow management for anyone who works as a real estate agent. It’s not necessary to struggle with bills between commission checks or to end up stuck if something doesn’t come in on time or pay quite as much as expected. Here are some of the issues to address and things to think about in order to have cash around when you need it.
Have a Plan For Income & Expenses
The first thing any real estate agent needs is a cash flow plan. It’s important to be aware of all of the bills, how much they are, and when they need to go out.
Use a system where you can clearly and quickly see all pending cash inflows and outflows. You can easily use an Excel spreadsheet or a Google sheet.
Paying them on time is very important to avoiding late fees and other expenses, and it also helps to keep your credit score high. But planning around commission checks instead of a more standard paycheck is not always easy.
It’s something an agent has to carefully consider, and it will need to be addressed early and revisited often. Bills and circumstances can change, and as they do any real estate agent will want to change and adapt. Having a good plan that is clear and direct, but that can be adjusted, is the right way to be prepared when it comes to cash flow.
Prepare for the Worst Financial Situations
While it is generally never fun to imagine the worst case scenarios, it is sometimes important. One of those times is when it affects cash flow. The more savings a real estate agent can put aside the better, because sometimes houses don’t sell for a while.
Deals can fall through when selling a home and things can go wrong. If that happens, having some cash available can help an agent breathe more easily.
It’s not always about having money, but when bills need to be paid having enough in the bank matters. When agents prepare for the worst, they are ready if things go very wrong. That puts them in a better position when things go well, so they can continue to save money for a “rainy day.” If that day never comes that’s a good thing, but if the day does come they will be as ready as possible for it.
That can provide not only extra money saved but also peace of mind.
Get the Financial Help You Need
Sometimes, no matter the best efforts of any real estate agent, there can be a time when they are simply going to be short on cash before the next commission check comes in. That’s never a good feeling, but it is one that happens to a lot of agents. Especially when agents are just starting out, or during times when the economy is down and real estate sales are slow, being short on cash can happen.
With a commission advance service, you can convert the commissions you have into cash right away. There is a fee, but it’s well worth it to make sure you have enough cash on hand.
Realtor Cashflow Resources
When you see a trouble spot developing in your cash flow projections, take action and make sure you get an advance. Then you won’t have to worry about any bills going unpaid or having to cancel that planned vacation just because a commission took longer to come in than expected.