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What Should My Real Estate Marketing Budget Be?
If you ask ten different agents, "How much do real estate agents spend on marketing?" you will likely get ten different answers -- but the method to calculate that sought-after number might be the same. That's because the general rule of thumb across industries is to base your marketing budget on your total revenue. The U.S. Small Business Administration recommends allocating 7-8% of your revenue to marketing if you do less than $5 million in sales for the year. Although this is a general recommendation that isn't specific to the real estate industry, it's consistent with the way many agents determine their marketing budget. It's common for real estate agents to allocate approximately 10% of their gross commission income to marketing activities. How much real estate agents spend on marketing will differ by each individual or team and must also take their goals into account and how their current transaction activity aligns with those goals. For instance, an agent might decide to pivot their 2021 strategy and double-down on "Just Sold" and "Coming Soon" digital ads to reach more seller leads if listings are flying off the shelves in their market without any digital advertising. The calculation is the easy part: The more difficult part is deciding where to invest each dollar for maximum return. What marketing activities should my budget cover? You could spend all day, every day, carrying out marketing activities. There's always another email to write, lead to follow up on, digital ad to publish, focus group to talk to, and newspaper reporter to pitch. Real estate agents don't have time for every promotional activity under the sun. There are a handful of tried-and-true tactics that should be on every agent's list, however, whether you're a seasoned vet or just starting to dabble in marketing your business. Email Marketing Emails aren't optional, and Gmail isn't an option (or AOL, Yahoo, etc.). Real estate agents are running a business, and that business needs the ability to set up automated workflows that nurture leads and send market updates, e-newsletters, open house schedules, and other valuable, local market content to their sphere. Cloud-based email marketing software isn't very expensive (unless you're managing many thousands of contacts). Likely, you will pay less than $1,000/year for your email service. Before you sign up, compare competitors and their plans. Many offer a free base level that could sustain you for several months as you build a rich email program. Then you may consider upgrading to access additional tools or add more contacts that exceed your current limits. Here are a few established brands to give you a sense of service costs (rates are valid as of April 2021): MailChimp is a go-to option for small businesses across industries. Its pricing plans range from free for a basic plan to $299 per month for a premium subscription (with up to 500 contacts). More than likely, you'll start at the free plan and upgrade to the mid-range $9.99/month or $14.99/month plan when you need to activate more features. ConvertKit is another popular option with monthly pricing, as well as yearly rates that will give you a two-month-free discount. The baseline plans allow for up to 1,000 contacts and include a free tier and two paid tiers ($29/month and $59/month). And though it isn't a full automation system, agents should know that contacts they invite to Homesnap will be automatically signed up to receive a branded newsletter — all free to Homesnap Pro agents, so you don't have to work this extra into your budget. Plan to spend up to 15% of your real estate marketing budget on email marketing activities. Online Presence If leads and prospects can't find you online, do you really exist? To most digital-savvy buyers and sellers, who rely heavily on the Internet, the answer is a resounding "no." Think about it: If you looked up the local Italian restaurant to see its menu and it didn't show up in search results, wouldn't you wonder if it had closed? The same is true for your real estate business. You need a robust online presence to prove that you're an active, successful agent and to build trust with those who are considering working with you. With so many agents in the industry, you don't want to be unfindable online. The two best marketing activities to build your online presence are website maintenance and Google Business Profile management. All real estate agents should have a website that is modern and responsive across devices, has engaging and valuable content for buyers and sellers, and hosts lead capture pages for all your active listings. Make sure your website is optimized for search engines so that it shows up near the top of results when someone Googles your name. Another top tool to improve your online presence is the Google Business Profile. This profile takes up the right column on the Google search results page. It contains your business contact information (including a link to your website), your business's bio, photos, content posts, and, arguably most important, your star rating and online reviews. However, you cannot just set up your profile and leave it be. It's imperative that you keep it updated and active on a weekly basis. This helps improve SEO and the odds that your profile will appear in search results for a wider range of search terms, such as "real estate agents near me." Compare these popular options that will help you boost your online presence (rates are valid as of April 2021): Homesnap Pro+ is a bundle of upgraded benefits designed just for real estate agents, for just $99 for the first year (regular price is $599). A premium version of the free Homesnap Pro account, this membership includes additional features like a Google Business Profile (verification, assembly, and management), a custom responsive real estate website with a unique domain, advanced MLS search capabilities and custom lead pages for every one of your listings. Placester is only a website creation and hosting platform, and therefore doesn't offer Google Business Profile services (we aren't aware of any other marketing platforms that combine the two). There are three plans—$100/month, $190/month or $200/month—that include a responsive website, unlimited pages and posts, lead capture, and IDX listing display tools that may incur an additional fee. Plan to spend up to 15% of your real estate marketing budget on building a robust online presence. Digital Ads There are many benefits to running digital ads on platforms like Google, Facebook, Instagram and Waze. These include: expanding your reach, building brand awareness, generating leads and promoting your listings (active and coming soon), open houses, price cuts and closed sales. Digital ads should be a core part of how much real estate agents spend on marketing. As such, your all-in costs could be as much as 50% of your available budget. This will include actual advertising fees, as well as costs from designers and lead qualification services, if you plan to outsource those functions. Advertising fees can fluctuate month to month, making the cost of this marketing activity a bit less predictable than the other tactics we covered. One way to keep costs flat and consistent is to work with a trusted marketing partner, like Homesnap Pro Ads or Concierge. These ads services will manage everything from design and copy to optimizing the settings and spend throughout each ad's run. Concierge goes a step further and also includes live, direct phone call leads from high-intent leads via Google's Local Services Ads. Plan to spend up to 50% of your real estate marketing budget on digital ads. Final Thoughts You'll notice that our calculations leave 20% of your budget remaining for other activities. This could be spent on things like branded freebies, postcard prospecting, newspaper ads, etc. It can also be reallocated to the tactics we already mentioned if you need a boost in one of those areas in a given month or year. Keep in mind that there is no silver bullet that will generate overnight success, and the same is true for your marketing. The return on investment will be high when you're able to maintain the activities over months and years. Choose your tactics, budget, and third-party partners carefully, and then stick with your plan to see results. To view the original article, visit the Homesnap blog.
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Save Your Hard-Earned Money By Incorporating (and Other Financial Tips for Real Estate Agents)
Are you taking advantage right now of every tax break that is legally available to you? Probably not. The genius Albert Einstein is attributed to saying about taxes, "The hardest thing in the world to understand is income taxes." Are you trusting your tax advisor to provide you with all the tax saving benefits available to you? As experienced as many tax advisors are, most largely do a great job of recording the history that you give to them. It is far more uncommon to find an accountant that provides you with insight about tax breaks that you are not already taking. Let's explore some tax saving strategies and benefits – recommendations to put you in the driver's seat and potentially put more money in your pocket, legally.
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Best Apps to Track Your Business Expenses: Expensify and Mile IQ
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5 Important Tips When Hiring a CPA to Prepare Your Taxes
It's tax time and a perfect opportunity hire a good CPA to advise and prepare your tax return. Have a CPA already? Great! It is also a great time to assess whether they are an asset to your business, and whether they are fully addressing the current and future needs of your real estate business.
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Get Ready to Knock Your 2019 Taxes Out Cold with These Apps!
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5 Steps for Planning Your 2019 Real Estate Marketing Budget
It's already December — 2019 is sneaking up on us! Now is the time to plan out your real estate marketing budget before the new year hits. Ready to get on the right track for next year? Here are a few tips for getting that budget started.
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It's Tax Season: Tax Preparation for Real Estate Agents
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Managing Your Commission to Last the Year
The first commission check you earn in real estate feels amazing. After receiving it, it can seem like you're set as far as finances go. After all, you just have to keep doing what you're doing and the commissions will keep rolling in. It's easy to forget that there are good months and bad months, and that you have to make each check last. Find tips to make your commission last the year here!
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10 Easy Ways Agents Can Run a More Profitable Business
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Five Expense Tracking Apps to Prepare You for Next Year's Tax Season
As the 2016 tax season comes to an end, you become your own private investigator: searching every crevice, purse, drawer, or shoebox imaginable to find every last receipt or document needed to show proof of purchase for business expenses. That's the burden of tax preparation: whether you own your own business or work as a self-employed employee (1099 filing status), you have to show proof of all your business expenses. Knowing what you can deduct and keeping track of these expenses throughout the year can take the hassle out of filing your taxes. Tax Deductions As a real estate professional, you need to know which of your expenses are tax deductible. Being aware of possible deductions can help you know which receipts to save and what activities and expenses to document. (*We advise everyone to consult their tax professional regarding their specific situations and to find more information about applicable tax deductions.) Here are some tax deductions you may qualify for. Vehicle According to the IRS website, vehicle deductions vary. First, you have the choice of adding up all expenses like gas, repairs, oil, and (yes, even) car washes, or you can use the standardized mileage deduction. The way the IRS standard mileage works is for every mile driven, a certain dollar amount is applied to it. Second, if you are leasing, you can expense the complete payment of your car or deduct annual depreciation if owned. Finally, if you don't own a car, Uber and taxi expenses are deductible. Home Office / Supplies If you have a dedicated work space in your home (not including your living room or kitchen), a portion of your rent / mortgage based on the size of the space is deductible (please see the IRS website for home office specifications). This is also applicable to internet, cable, and phones used within the home. Office supplies like staples, paperclips, and stamps used in the tax year can also be deducted. Office furniture like desk, chairs, and bookcases can be deducted all at once or by depreciation.
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4 Ways Real Estate Agents Can Better Manage Their Wealth
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The Power of Automation: Sync your transactions to QuickBooks
Wednesday, January 18, 2017 at 10:00 AM PST In real estate we know how important it is to keep your business and accounting streamlined, so we have a fantastic solution that we built based on our own customer's needs and feedback for just that purpose! Connect Brokermint transaction management to Quickbooks and pay agents, invoice customers and send all receivables and payables, eliminating double entry and allowing you to keep your books straight, seamlessly. In a few days, on January 18 at 10am PT, our team will be hosting a webinar to share best practices with you: Why QuickBooks is a perfect fit for thousands of businesses How to sync your transaction data to QuickBooksHow to cut checks and pay your agents How to setup recurring/monthly billing How to do direct deposits and much more... All attendees get 25% off the first 3 months of their Brokermint subscription. Register now!
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Real Estate Agent Tax Tips: Are You Really In Business?
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Friday Freebie: This App Keeps Track of Your Mileage Deductions So You Don't Have To
The average agent drives 30,000 miles per year, according to NAR, and is therefore eligible for over $16,000 in driving-related deductions--but only if they keep detailed records of their drives. That's where a lot of agents fall down--and where today's Friday Freebie can help. Read on to learn more! Track 40 Drives for Free with MileIQ (and get a special discount for the rest) Ask any agent, and they'll likely admit that their car is like a second office for them. We've heard of agents driving around with everything from their laptop to a change of clothes to tiny portable printers. And it's no wonder--agents are constantly on the go, driving from showing to showing and other client appointments. All of that driving adds up to a significant chunk of change that agents can deduct on their taxes each year, but the challenge is in keeping mileage records that comply with IRS requirements. That's where MileIQ can help. MileIQ is a mobile app that relies on your smartphone's location capabilities to automatically track and log your drives. The app runs in the background on your phone, and automatically senses when you're driving, so you never have to worry about turning it on or off. Once a drive is completed, MileIQ prompts you to classify the trip as business or personal. Simply swipe right to classify as business, and left to classify as personal. It sounds simple, and it is, but MileIQ offers a host of other features, like: Detailed information about each drive, including a mapped route, start and end times, miles driven, and potential dollar amount of the deduction The ability to add notes to a drive, including parking a toll fees, as well as denote a purpose (client meeting, errand, etc.) Name locations that you visit frequently Set work hours so that all drives during that time are automatically classified as business Set-up vehicle profiles A web dashboard that lets you manage and edit drives Detailed reports that can be exported in multiple file formats and imported into your accounting program of choice Mileage logs that are IRS-compliant MileIQ is free to use for up to 40 drives every month. After that, the app requires a nominal fee to continue using. But never fear--we've negotiated a discount on that fee for our readers! For a limited time, RE Technology members can can save 20% off the cost of an annual subscription to MileIQ using the code RETECH20. Click here to try out MileIQ and claim your discount today!
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5 Tools Real Estate Agents Will Love
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Product Review: MileIQ Is a Hassle-free Way to Track Your Mileage Deductions
Real estate agents drive an estimated 30,000 miles per year, according to the National Association of Realtors. That adds up to a lot of expenses in gas, maintenance, and insurance. Fortunately, IRS rules allow you to deduct those business related expenses at a rate of 54 cents per mile--or over $16,000 a year for the average agent! While a deduction of that size makes a huge difference in your annual tax bill, the IRS requires that you keep a detailed record of business related drives in order to qualify for the deduction. That's where MileIQ comes in. MileIQ is a mobile app that automatically logs all of your drives and keeps track of your potential mileage deductions. Now agents can say goodbye to the old pen-and-paper log and lean on their GPS-enabled smartphone to keep scrupulous records for them. How It Works MileIQ taps into your phone's location services capabilities--including GPS, Wi-Fi, and cell tower triangulation--to automatically track all of your drives. After a drive is completed, the app prompts you to classify the drive as either personal or business. This is done with a single gesture: swipe right to classify as business; swipe left to classify the drive as personal. As you can see in the image above, the app will display the route of your drive on a map, start and end times, length of trip, and the potential dollar amount of the deduction. In addition to classifying your drive, you can optionally add notes (including parking and toll fees), select which car you drove, or delete the drive altogether.
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6 Ways a Mileage Tracking App Saves Agents Time and Money
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5 Tips to Separate Business Expenses from Personal Expenses
While independent business ventures like real estate can afford self-directed workers personal and economic freedom, that freedom can also cause individuals to mix their personal and business expenditures. While this practice does not in itself trigger an IRS audit, it can force you to employ guesstimation tactics when reporting business expenses to the IRS, and this can lead to tax woes and limit the potential for business tax deductions. Use the following tips to separate business expenses from personal expenses and maximize your business tax deductions. Be Contemporaneous, Not Extemporaneous Just as it is wise to maintain mileage logs to document your mileage for the IRS, it is also wise to track expenses contemporaneously, or roughly as they occur, rather than impulsively filling in the blanks come tax time. Small expenses in particular are not likely to register in your memory unless you register them on paper through either bookkeeping software or a simple spreadsheet. Treat your expense logs as living documents that are updated at regular intervals. Adopt a Business Mindset When Tracking Personal Expenses Your financial mindset, as much as your behavior, can cause you to haphazardly track expenses. Oftentimes, diligent workers give business expenses the royal treatment in their budget, tracking business accounts payable with precision, but relegate personal expenses into a non-itemized, no-man's land of miscellaneous expenditures that can be identified as easily as a needle in a haystack. Track personal expenses with the same methodical, entrepreneurial instinct by which you track your business expenses.
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When Can Your Clients Deduct Moving Expenses?
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QuickBooks integration for your real estate back office (8/17)
Wednesday, August 17, 2016 at 11:00 AM PDT This webinar is for both existing and new QuickBooks users who want to automate data entry, integrate with back office, setup recurring billing, etc. Why QuickBooks is a perfect fit for thousands of real estate businesses How to automate data entry and connect your back office to QuickBooks Bonus: Invaluable Best Practices. Recurring billing, direct deposits and much more Register now!
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Agent's Guide to a Pain-free Tax Season
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Friday Freebie: Track Your Marketing ROI with this Worksheet
You know how they say you have to spend money to make money? It's true, but you have to spend wisely in order to get the most bang for your buck. To better judge which expenses are worth keeping in 2016, zoom in on the return on investment (ROI) for each. This free ROI worksheet from Zillow will help you do just that. It's the second in our series of Friday Freebies that help you prepare for a successful New Year (You can see last week's 15-task business checklist here.) Free ROI Tracking Worksheet, courtesy of Zillow This little gem is a simple Excel spreadsheet that doesn't require you to share any contact info in order to download (refreshing, right?). Instead, it asks you to list your monthly expenses (advertising, website, CRM, etc.)--and annual commission in order to calculate your ROI. Like we said, it's simple. But the worksheet is flexible enough that anyone with a little Excel knowledge can use it as a starting point for more complex ROI tracking. Zillow, for example, recommends using a new worksheet for each campaign. You can modify it in whatever way works best for your business. Tip: If you add new line items to the "Expenses" section, be sure to merge Columns A&B and C&D for each new row. Want to start measuring your success today? Download Zillow's free ROI Tracking Worksheet now!
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Tax Tips for Agents – Part 2
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Tax Tips for Real Estate Agents – Part 1
Have you ever received a letter or phone call from the IRS pointing out deductions that you missed on your tax return? Me either, and as nice as some of those IRS folks are, I have a feeling we shouldn't wait for such a phone call. Nope, it's completely up to your accountant to ensure you get every last deduction you're entitled to. But accountants can't pull the proof for these deductions out of thin air; that's your job. And that requires a diligent adherence to that task we all hate to do: record keeping. Documentation Keeping accurate records is vital to your pocketbook, according to CPA Gail Rosen. "It's so important to recognize the power of a deduction and not to miss any," she warns. "I liken it to downloading an app to your phone," explains Bill Zumwalt, "The Tax Coach" for real estate agents, out of Tulsa Oklahoma. "When you download an app you get a long list of legalese called terms and conditions. Tax strategies, like the home office, are just like apps," he continues. "You find one that fits, you download it, and then you read the fine print – the terms and conditions," says Zumwalt. He goes on to explain that the IRS has terms and conditions for deductions – things you need to do and requirements to meet to make a particular tax strategy work. "The devil is in the detail," warns Zumwalt. "If you have documentation, it will be your friend." Let's take a look at what the pros say are some of the most common tax deductions that agents are entitled to, and suggestions on how to document them.
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Organize Your Way to a Painless Tax Season
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5 Things to Look for in a New Remote Bookkeeper
Guest contributor Kashoo says: It was hard enough hiring the right person for your bookkeeping needs when you had a stack of 100 resumes to review. Now you've got people spread out across the globe vying for your attention through email marketing, websites, social media... the list goes on. And it's entirely true that when it comes to the physical tasks of bookkeeping, geography doesn't matter much anymore. So with that said, how do you make the right choice in selecting a remote bookkeeper for your business? To help you navigate, here are a few criteria to consider... Location, Location, Location This sounds strange, right? Remote, by definition, means not nearby. But hear me out. In this case, it's not so much where your potential bookkeeper lives, but when they live. Take into account time zones when deciding on a new bookkeeper. If you know you'll need to talk on the phone, or are likely to request a report any given morning on short notice, will they be available (read: awake) when you need them? References and Reputation For bookkeepers, it's no longer good enough to include a "references available upon request" note. Your new bookkeeper should have a good track record, and should be able to connect you with their other remote clients.
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Budget Season: Will You Be Making These 3 Marketing Expenses?
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Was the iPad Built for the Real Estate Professional?
Guest Contributor Kashoo Says: The short answer to that question is, “probably not,” but the iPad is quickly becoming a mandatory go-to tool for the real estate professional. And for good reason! From email to presentations to virtual tours and meetings and much, much more, Apple’s wonder tablet is an ideal complement to the busy, always-on-the-go real estate pro. It’s “always on,” it’s beyond easy to use, battery life meets long day demand, and with 4G or wifi, it’s always connected. But beyond being a fantastic tool for the real estate business, the iPad is an incredible tool for managing your real estate business. We’re talking about back-end stuff like accounting. The clunky, dreaded stuff. The tasks that, while vital to the health of your business, often fall to the back-burner. The point is, the iPad is making it easier than ever for a real estate professional to run his or her business. And that saves energy, time and--most importantly--money.
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3 Tech Solutions for Tax Season Woes
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How to Prepare Your Business for the End of the Year
We spotted this post on the Kashoo blog: Yes, it’s here: the end of the year, and a busy time for you as a solo practitioner or small business owner! As the new tax-filing season looms in the first quarter of the new year, it is also the time for you to review your business finances. If you have been faithfully utilizing your small business accounting software, it should be very easy for you and your accountant to generate the reports and financial statements necessary for your end-of-the-year review session. Year-end financial statements are used to prepare taxes, are used as the foundation for all other reports in the future, and are used to assist with the important future business decisions you will be making. In the U.S., many of the tax credits for charitable contributions may be ending, so this is also a good time to review and re-evaluate your year-end donation strategy to ensure that your funds reach your charities in time.
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