Every business has only two ways to improve its profit. It can either increase its income or lower its costs. Ideally, it should do both. But keep in mind - this is easier said than done. In order to make money, you need to spend some, which means you have to have expenses.

However, there are ways to lower your overhead expenditure, regardless of the type of business you’re in and real estate is no exception. Basically, you have to look into the ways of spending where you need to spend money, but not spending more than necessary. Treating such expenditure as an investment, you will create potential for future growth. Here are some financial tips that might help you along the way.

However, there are ways to lower your overhead expenditure, regardless of the type of business you’re in and real estate is no exception. Basically, you have to look into the ways of spending where you need to spend money, but not spending more than necessary. Treating such expenditure as an investment, you will create potential for future growth. Here are some financial tips that might help you along the way.

Don’t overspend on equipment

No business can thrive today without the use of technology and your real estate business simply has to include digital and technical access. However, you have to be shrewd about it and not spend tons of cash on your technology. People will see that you have the latest mobile phone, tablet or laptop and that might show them that you’re successful and therefore capable of doing your job. 

On the other hand, they might interpret it as a sign of unnecessary expenditure or showing-off and would feel ill-at-ease to hire you. It’s natural that many clients feel reluctant when it comes to hiring a real estate business that spends a lot on technology, when the same job can be done with less expensive office tech gadgets. They don’t want to feel like they are paying over the odds so that you can have the latest gadget. So, make sure you get the right equipment, but don’t overspend on it.

Replace paid tools with free ones

There is no need for you to use various tools to promote your business or make your operation smoother and pay for them, when there are so many free options that can do the trick. For example, social media can provide extremely efficient advertising and you don’t have to break the bank. Also, cloud storage and file sharing are now offered at low cost by various services and apps. You can even manage projects using free software, which should decrease your expenditure.

Simplify operations

One of the problems that many real estate businesses fail to notice is that too much time is spent performing necessary tasks. If, on the other hand, these processes are streamlined and made more efficient, less working hours will be spent on them, which means people could devote more time to income-generating activities. One such thing is the popular payroll card, which automates the entire payroll process and integrates with any payroll provider. You can eliminate the cost and waste of paper checks and allow your employees quick access to their money, without the need to pay check-cashing fees.

Tax breaks

You should really look into the option of making more savings through various real estate tax breaks available to you. Some of the most prominent ones are:

• Deductions: many expenses, such as mortgage, loan interests, office expenses, etc., related to your real estate investments and business can be deducted.

• Capital gains: Both short-term and long-term profits you make can be subtracted from what you owe on your taxes.

• Depreciation: if your property loses its value, you can subtract your losses. The same applies to office supplies that can be deducted over a few years.

Your accountant should be able to tell you more about the way in which you can reduce your tax burden without breaking the law, but you don’t want to pay more than you need, right?

Finding cheap labour

Real estate, like most other businesses, spends a lot on labour. You could try to save some money here by hiring interns, since they are free or cheap and can do a lot of the grunt work that you’d have to pay someone to do instead. You could also use automation tools to automate social media, email marketing, project management and other practices, thus improving efficiency in the office. Finally, if you have some free time, consider taking up some responsibilities yourself, but don’t overwork yourself.

Be careful when borrowing

Real estate business is all about investing in new properties or upgrading the existing ones, which means you need a lot of money. In most cases, you have to turn to a bank and apply for a loan. While banks are happy to give you the money you need if your credit rating is good, you need to investigate all options available to you. Look for reduced interest rates and/or longer loan repayment periods. Make sure you don’t spend more than you need to, since the differences can be huge when it comes to the terms and conditions offered by various banks.

Real estate is a very specific business, but many of the tips that apply to any business can be used here to help you avoid overspending. If you implement them successfully, you’ll be able to increase your profits and invest more in your future projects, which means your business will thrive.