Investing in real estate is one of the best ways to make money, though it usually takes time to gain a profit from your investment. Many people who have achieved financial independence started from investing in real property.
It is considered to be the most common way to become a millionaire. Renting out and flipping a real property are the most popular ways to become a real estate investor. Also, some people earn money by making speculations, but this way is quite risky and requires special knowledge.
Investing in real property is not suitable for those people who are trying to achieve a fast result. This approach is aimed mainly at those people who want to make a considerable sum of money during a long period. In order to start investing in real property, you need to put some money aside for the initial down payment and for extra expenses like fees. Everything starts with a solid financial plan.
You need to calculate the difference between your return and expenses. Thus you will define the sum of money to put money aside and find the opportunities to implement this plan into practice. There are plenty of applications and programs that help to manage your money and draw up the budget.
In the following article, we will review the most common and simple ways to increase your income, save your costs and gain some extra profit.
Purchase From Wholesale Vendors
Purchasing the products in bulk is more cost-effective than buying from retailers. The price is usually lower than single orders. Besides, the vendors often give discounts for bulk orders. To increase profit, you can also negotiate for better prices and more discounts.
Sometimes it is easier to buy products directly from manufacturers who produce the products. This option is available for some niche products.
Save Electricity and Water
To save electricity use passive solar design, when the energy of the sun is used for cooling or heating of living spaces. You can also install a solar water system to provide you with hot water on cold days. This helps to reduce energy use, including the visible decrease in total costs for energy.
Always switch off the power in the workplaces when your real estate team leaves, turn off air conditioners, unplug all electric devices.
Reduce Paper Consumption
Choose online or paperless billing over physical copies. To spend less, use online real estate marketing, send emails and use social media instead of promoting your services with the help of printed brochures.
If you need to print some documents, use small fonts, single line spacing, and lower margins. These simple actions will help you to reduce the usage of paper slowly.
Many companies use telecommuting or remote jobs to reduce costs. An employee works remotely from the house, apartment, private office, library or any other venue. His or her work is coordinated by the employer via mobile phone or Internet.
The main advantage of this method is the decrease in employee costs and the increase in productivity. In this way, you will achieve your commercial goals.
In addition, you can allow your staff to work remotely from home a few days a month. This method is also helpful if your goal is to save some money.
Use Space Effectively
Along with telecommuting, the efficient use of space helps to organize your work in a more productive manner. Divide your office space into different zones with minimum furniture, create dual-purpose areas, fill the wall space with shelves for files and folders.
Manage your office according to the needs of your staff and business requirements. Desk sharing is a good practice, especially if you have the people in your team who work flexibly or part-time. Think of the ways how to provide your staff with access to shared and personal files.
You do not necessarily need to buy new products for the company. There are many good products in the normal condition that you can buy at a nominal rate. Company cars, laptops, printers, furniture, and other items can be re-purchased. You can buy these products at a cheaper price because taxes are also excluded from the price.
Stop Auto-Recurring Payments
Sometimes the bank continues to take the money from your credit card because of your subscriptions. In some cases, people forget to cancel certain subscriptions or they are no longer interested in the service. Check your bank statements to stop some recurring expenses that are not necessary for you anymore.
Cancel the subscriptions on some services. Analyze your current subscriptions and tools.
Reduce Software Expense
There is a good opportunity to save on software due to the free software in the market.
Save For Taxes
Many owners of the business face difficulties when they need to pay taxes. For this reason, it is essential to put some money aside for the final payment, in order to define the budget in advance. This approach will also help you to avoid the extra expenses related to taxes like penalties or late payment fees.
Secure Your Website
To avoid the losses from cyberattacks consider investing in an SSL certificate (Secure Socket Layers). If you have a website or a blog about real estate then you need SSL. This certificate encrypts your business data and protects it from hackers.
Limit Employee Expenses
If you want to save money, it is important to control employee’s expenses. Free lunches, free petrol, and other costs need to be limited and included in a fixed budget.
The largest item of expenditure is the expenses for business travel. These expenses always include the costs of accommodation, travel costs, and the expenses for the meals.
It is wise to discuss the extension of the lease period of your real estate premises with your landlord. You can also negotiate about decreasing the rent payment by opting for a yearly contract.
The meeting is communication in a group on a predetermined topic with an established duration and set time. Meetings can be effective, not effective or just a waste of time. As we know, time is money, so if your aim is to work in the most efficient way, then you need to arrange a successful meeting.
Make sure that only the most important people are invited to the meeting with the clients to make transactions. If irrelevant employees will attend the meeting, it will affect their productivity in a negative way and consequently, it will have a bad effect on the business.
Hold the meetings in the office instead of riding to town destinations in order to reduce your expenses.
Recruit Freelancers and Interns
Your real estate company should not necessarily consist of highly qualified people. Certain positions demand high qualified professionals and specialists like real estate agents or realtors, although there are certain tasks which can be done by employing interns for a half-time job or recruiting freelancers.
Sometimes the costs on contractors get out of control because managers view these expenses as a separate issue. Some businesses spend more costs on contractors for the reason they believe that it provides more flexibility if some conditions change. On the contrary, sometimes it is difficult to find contractors with specific skills. To ensure that your company is focused on the costs required for contractors, make a list of the contractors with the sum of their salaries and this will create the visibility of the expenses.
There are some tasks in your company that can be done via outsourcing. Find out what these tasks are and delegate them to the outsourcing company. It helps not only to save office premises but also to reduce employees’ costs like salary, workspace, insurance, and electricity.
Of course, outsourcing saves your time and helps your business to work more effectively. Many daily activities of real estate agents include distributing emails and analyzing the market to find out the sales in the specific area. These tasks take a lot of time which the realtors can spend actually selling the houses.
Reduce Maintenance Expenses
Analyze the areas of maintenance and the regular expenses needed. Train your local repair employees for certain maintenance, instead of calling the standard repair personnel. This approach will help you to reduce most of the expenses on maintenance. Some preventive actions will also help to maintain the equipment in good condition and reduce the costs to a large extent.
Use Social Media for Job Posting
Nowadays, social media is a good instrument not only for the promotion of your business but also for searching or applying for a job. The recruitment sites always require that the companies pay for posting vacancies. You do not need to invest in this item of expenditure because you can use social networking opportunities.
We have described many ways of saving your costs in order to reduce your expenses, make your business more effective and provide you with the opportunity to put some money aside, gain higher profit or have some money in the budget that you can later use for investing or for the other business purposes.
Take into consideration purchasing products from wholesale vendors, saving water and electricity through passive solar design and reduced use of resources, buying second-hand furniture and equipment. Use outsourcing and remote job opportunities to lower expenses, hire freelancers and interns, reach out to outsourcing agencies, minimize meetings. These tips will help to manage your business and to gain higher income.
Budgeting and tax planning are essential issues for your business because it keeps you from spending too much money and facing problems with regular payments. The most common costs for business are location expenses like mortgage, utilities, computer expenses, driving expenses, the costs for maintenance, insurances, taxes, marketing costs, travel expenses, and others. To make your business cost-efficient, you need to make a list of these expenses in advance and also prepare a sum of money for extra costs.