Want to know how to become a successful real estate agent and grow your true profit? True profit is the cash left in your pocket after everything and everyone relating to your business is paid off like expenses and taxes. It’s the actual money you have remaining to pay yourself - and you could be earning more!
Calculating and Increasing Your True Profit
As an independent real estate agent, you’re running your own business and are responsible for your own business finances. And, unlike employees on a corporation’s payroll, you are also responsible for your own taxes.
As real estate agent, you need to know your true profit.
The simple formula to calculate true profit is commissions – expenses – taxes = true profit.
How do you get more profit?
- Increase Commissions
- Decrease Expenses
- Decrease Taxes
Increase Your Commissions
Growing your real estate business’s gross (total) commissions is a powerful step you can take toward growing profit.
While your commission percentage remains the same, your total commissions grow by adding more clients and closing more listings.
You don’t need to spend a lot of money to get more leads. In fact, some of the most profitable companies in the world don’t spend much on advertising; their customers do it for them. Deliver referral-worthy customer service and don’t be afraid to ask for the referrals.
Decrease Your Expenses
Manage your expenses and lead with revenue. As The Millionaire Real Estate Agent teaches, for every dollar invested in a business expense, you should receive some multiple of that dollar back. If you are spending money and not getting a return, it might be time to cut that expense.
Decrease Your Taxes
Learn about the 10 tax deductions for independent real estate agents. Check out the full list of top tax deductions for independent real estate agents here, which goes into detail on topics like what your home office deduction might be worth.