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Unquestionably one of the biggest problems with being a real estate agent is the lack of a steady paycheck. It can be especially difficult for new agents eagerly hunting that first sale and watching their savings depreciate.
As one agent I worked with said “Your first year in real estate is spent going into debt. The second year, you pay off all the debt. By the third year, you actually start making really good money!”
There are some ways to handle this better than others – doing a little research and calculations will help you decide the best option for you. Here are some options to choose from if you’re short on cash until that next closing (or even if there is no closing in sight!):
1. Short-Term Cash Loans: Short term cash loans are ideal for a situation where you have bills due yesterday but don’t have a closing until another week or two. You can choose to only have the loan for a few days or a week and pay interest for that short time period, which can help motivate you to pay it back quickly instead of racking up credit cards with minimum payments. These loans can usually be obtained quickly, making them good for avoiding bounced checks or other quick money needs. Many can often also be paid as installment loans.
2. Personal Loans: Personal Loans can be another option where you borrow a fixed amount and pay back a set amount each month. They can typically take a week for application and approval, but could be a viable option. They may also be difficult to obtain with a less than steady income.
3. Credit Cards: Credit cards can be good and bad, depending on the card’s terms and conditions. Some cards can be used to “stretch” money – meaning you can pay for something in September and not owe for it until November. Always use credit cards wisely – it can be easy to fall into the trap of just paying the minimum payment and never actually make a dent in the amount that needs to be paid back!
4. Friends and Family: Another option is to borrow money from friends or family. This can always be sensitive though, so be really careful with this one!
5. Part-Time Employment: This possibility gives you income without going into debt, but it could give you a lot of grief from your coworkers and clients may potentially not want to work with you, since most prefer a “full-time” agent. However, it is possible to do – I waited tables on weekend evenings for about 6 months to help until things started going well enough I felt comfortable that I didn’t need to anymore!
6. Other Creative Ideas: There are also other ways to make a few extra dollars if getting a loan or part-time job isn’t right for you – sell stuff you no longer use, monetize your real estate blog, set up a lemonade stand (okay, so I’m not sure that one will really bring you a lot of money!), offer to help a busier agent with some stuff for a fee, etc. etc.
Without a steady paycheck, it can be easy to rake up a lot of debt or worry about your finances as a real estate agent. Always be sure before deciding on anything you carefully consider the pros and cons of each, and make sure you focus on building your business so hopefully it won’t be a concern in a few months!
Have any other suggestions for what an agent can do when money gets tight? Feel free to leave a comment below.
2 Comments
I always suggest newbie Realtors to keep their night jobs until they get a few deals going. I worked waiting tables for the first year that I was in the business. It’s a great way to meet clients for a new agent as well.
One thing a new agent can do for immediate cash is leasing. The pay isn’t good — but its one way to get some transactions under your belt. It gets you in the neighborhoods. You have to be careful about picking your clients. Some leasing clients can take up as much time as a buying client. So choose carefully.
I always allow our agents to take 100% of the commissions on leases. I figure if they are doing leasing its because they are cash strapped. Its a survival tool.