The holiday season may be one of the most exciting and hectic times for real estate investors, but it can also bring extra financial pressure. So when it comes time to make critical and even tough budget choices for you real estate business, what should you be doing?
While most real estate markets appear to be enjoying an incredibly high volume of activity for the season, and it is sure to get busier as we approach the New Year, many investors and other business owners are facing some significant financial dilemmas.
The pressure to give, give big, entertain and take time off can be tremendous at this time of year. While the economy and property market are both looking up, many companies and business owners are still finding their legs after a few years of economic turmoil. Even those that aren’t necessarily strapped for cash may be erring on the side of caution when it comes to business expenses in order to avoid falling into insolvency.
If this includes you, you may be considering cutting back in certain areas. While this can help a struggling business, it is important to retain the important aspects of your business.
3 Items Real Estate Investment Businesses Can’t Cut From Their Budgets:
1. Real Estate Marketing
Real estate marketing budgets are usually the first things to get axed in tight times. Unfortunately, this just fast tracks what investors were most fearful would happen. When marketing is put on hold, the deals stop coming in and properties on hand sit idle. This virtually guarantees income coming to a grinding halt. Not only does this mean finishing the year poorly, but starting off the next with a substantial handicap. If investors must cut back on real estate marketing, it should be limited to scaling back or demanding better ROI.
A staff can be one of the biggest expenses for real estate investment companies. However, while downsizing might seem attractive for some, this is a pretty cruel time to be laying off anyone. If it is absolutely critical, try waiting until after the ball drops and give them some notice. Plus, recognize that top talent isn’t easy or cheap to come by. If they are talented, they are unlikely to come running back after being dropped days before Christmas. Real estate is a people business, now is not the time to burn any bridges. You never know where your next deal will come from.
3. A Reserve for Essential Assets
There are some elements to a real estate investing business that can be disastrous if lost. For example; your real estate website domain name and business phone number. If they are allowed to expire and the competition scoops them up, there goes the tools to generate new business, a lot of investment and many customers.
So where can real estate investors save?
There are likely many ways for real estate investors to make little changes that can add up to big savings.
Besides reconsidering how lavish holiday gifts need to be, consider alternatives. Perhaps you can drive less to save money on gas. Utility companies confirm that as much as 30% of electric bills are wasted by appliances being plugged in but not being used. If you have a $600 electric bill, that’s an extra $200 to save right there.
Make your office paperless, use fewer paid images in blog posts for the next month, trade in old phones and tablets when buying new ones.
Then consider how to get ahead for next year with improved budgeting, saving, planning and managing other expenses better.