Set Aside Those 2021 Commissions!
For real estate agents, 2021 was a banner year. Markets across the country saw record-breaking price surges, mind-blowing demand, and bidding wars not seen in years. While 2021 posed challenges for real estate agents (namely not burning out and helping buyers win multiple bid situations), many real estate professionals experienced higher than average earnings this year. Now is the time for some money-saving tips to help you turn this profitable year into a financially secure future.
5 Money-Saving Tips to Turn Your Commissions Into Financial Freedom
While we’d love to tell you that this market will last forever, we all know that real estate markets ebb and flow. That’s why it’s vital to take the commissions you make in an up market and set them aside. These money-saving tips and investment opportunities can help you turn today’s earnings into tomorrow’s financial freedom.
1. Pay Off Debt
The average American has more than $90,000 in debt, according to a 2021 estimate. While that includes mortgages, it also takes into account student loans, auto loans, and credit card debt. If you’re one of the millions of Americans with significant debt, the best thing you can do with those real estate commissions is get debt-free.
Even though paying off debt might not be the most fun thing to do with your real estate earnings, it’s truly the best way to ensure a secure financial future. Imagine what your life would be like without those payments! Debt-free living is truly the best long-term money-saving tip we can give.
2. Invest in Residential Real Estate
We don’t need to tell you that real estate is a good investment. Purchasing income-producing rental properties is a great way to create long-term wealth. Real estate agents are uniquely poised to invest in residential rental properties. You already know the market, have access to properties not yet available on MLS, and know which areas demand the highest rents.
Whether you’ve never purchased an investment property or simply want to add more to your portfolio, now is the time to buy. Put those real estate commissions to work and scoop up a rental unit or two!
3. Invest in Commercial Real Estate
You can further diversify your real estate investments by entering the commercial real estate market. Commercial real estate is most commonly split into four sectors:
Each of these categories represents unique pros and cons, with significant opportunities for building long-term wealth. Nearly anyone can invest in commercial real estate, too. Many investment firms offer programs that can help you buy in to commercial real estate ownership for as little as a few hundred dollars.
Transferring some of your hard-earned 2021 commission into the commercial real estate market could be a lucrative investment. Consult your financial planner or an experienced commercial real estate broker for more details.
4. Spend Some Money on Your Business
As the saying goes, you have to spend money to make money. Now that you have some padding in your business bank account, why not invest that capital back into your business? There are many ways you can take your real estate business to the next level:
- Focus on marketing to gain new clients
- Invest in new technology for your business
- Update your website
- Hire help and watch your business grow
- Attend workshops or professional development courses
You’ve experienced incredible success over the past year. Investing in your business’s future will ensure your continued success, even when the market slows down.
5. Increase Your Rainy Day Fund
The best money-saving tip is to…well, save money. Now that you’ve got extra digits in that bank account balance, it’s time to set some aside for a rainy day.
We all know that the real estate market is unpredictable. A major slowdown might not happen for months or even years in the future. But you can prepare for a potential dry spell by bulking up that savings account. That way, if your business does drop, you’ll still have enough cash on hand to live comfortably.
Even better, if the market remains strong, that cash could come in handy when an ideal investment opportunity comes knocking.
The 2021 real estate market means record earnings for real estate agents from coast to coast. While it might be tempting to splurge and buy that luxury car you’ve been dreaming about, these money-saving tips will be more beneficial in the long run.