Real Estate Agent Advice: How Understanding Cash Flow Leads to More Clients

Home Value Leads | April 10, 2018 | Uncategorized

Real estate agents run their own businesses. Like any good business owner, real estate agents must understand cash flow. What is cash flow? Put simply, cash flow is the money that moves in and out of your business in a month.

Real estate agents must understand cash flow because without an understanding, agents could spend more in a month than what they bring in. That’s not necessarily a bad thing if you sell stock in your company.

Most real estate agents don’t sell stock in their companies, though. Spending more in any given month than what they bring in could cripple their businesses. That’s why we decided to write a blog about cash flow and why it’s so important to you, the real estate agent.

Real Estate Agents and Cash Flow

It takes money to make money. As a real estate agent, you have numerous costs. Understanding some of those costs will lead you to understand why cash flow is so important.

Marketing costs – Real estate agents have marketing costs. Maybe, you use some sort of CRM system, like LinkedIn Sales Navigator, to find clients. Or, maybe, you purchase lists, create packages for would be clients, or advertise on bus benches.

Gas costs – Real estate agents have travel costs. Many real estate agents travel a lot. Gas costs must be accounted for. When a real estate agent spends money on gas, that real estate agent is spending money on his or her business. That could affect cash flow.

Other costs – There’s such a thing as time costs. Like all costs, this affects cash flow. For example, if you’re a real estate agent who must put your child into day care because you’re showing houses, day care is a time cost for you. You don’t have the time to not pay for day care.

There are more other costs than paying for day care for a child. If you think about it, you probably have several more costs than marketing costs, gas costs, and the costs of daycare for your children.

No matter how you pay for your monthly costs, you must pay for it without running out of cash. Running out of cash will kill any business. Think about that when you budget for your costs.

How Does Understanding Cash Flow Lead to More Customers?

When you think about it, cash flow for a business is the same as cash flow in every day life. The two aren’t different. If you can’t pay your bills at the end of the month, if you lack cash, you could be in some trouble. You might have to declare bankruptcy, just like businesses do every day.

For real estate agents, understanding cash flow will lead to more customers. Check out a few reasons why:

Understanding cash flow means you can pick up on a potential customer’s specific situation.

Competition in the real estate agency is ridiculous. If you understand cash flow, you’ll be better able to find houses for buyers that the buyers can afford. You’ll also understand the optimal times to upsell a house and when it’s a good idea to pull back on the upsell.

Cash flow are two key words that every real estate agent should understand. Like with most things, there’s a lot of information on cash flow. Study up on cash flow if you want more info on it.

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