Most people do not realize that being a real estate agent is not cheap. The old adage of “it costs money to make money” definitely applies to being a real estate agent. Just to become a licensed agent in the state of Texas you have to take 180 hours of real estate courses, and that usually costs at least $500. Then the test ($80) and licensing fees from the real estate commission ($299) you probably spent close to 200 hours of your time and close to $900 just to become a licensed real estate agent.
But wait, there’s more…
Do you want to know how much it is going to cost to be an apartment locator from home? You may be a real estate agent but there is a cost of doing business and I will lay out all of the cost you may or will encounter in order to be an apartment locator in the state of Texas. Some of it is optional, but most of it is just the cost of doing business.
Leads $0 – as much as you want
Some of you may have you own leads already coming in so you already know. Advertising in order to get leads is
probably the most expensive entry in your bookkeeping ledger. Some people pay for services to post ads, and some pay for services to build and/or advertise their websites. You can spend anywhere from a couple dollars per lead up to as much as you are willing to pay. A good lead source though is worth its weight in gold, because this is your primary income source. Spending smartly here will often pay big dividends later on.
Listing Services: $40+ per month
If you are going to be locating apartments for your clients then you will need a resource that can provide the information that the clients are looking for. There are several sources out there that can accomplish this. A free option is Apartment Data, and while their information is pretty good you will get what you pay for. Smart Locating, ALN, and other similar services are paid listing services, and usually start around $40 per month. Just remember that this is what your clients are seeing, and you want it to be presentable and accurate, otherwise your brand will take a hit.
Setup Company: $25 – $400
If you are just wanting to setup a company but work under a broker then a simple DBA will work. You can setup one of those at the county clerk’s office for as little as $25, however if you are wanting to setup an LLC then you will need to file with the Secretary of State(SOS). You can pay a service or accountant around $400 to set it all up for you, or you can just pay the SOS the filing fee of $250 and setup a registered agent for $50 per year.
Banking: $15 – $35 per month
Bank accounts can be free as long as you are doing a certain amount of transactions or maintaining a balance, but the checks $15+ and banking software are going to have an expense. Banking software you can get some freeware or Quicken for $60, but if you are conducting a large amount of transactions per month it would be much easier and more efficient with Quick Books Online which is about $20 per month.
Business Cards and Advertising Materials: $0 – as much as you want
Got to promote your brand. Laziness or not spending here can stifle the future of your company. Advertising is never an immediate return on investment but rather an investment in the future of your company. Brand awareness and so important for startup companies and yours is no different. Be smart how you spend here and you can get a lot of bang for your bucks.
IP Phone, Internet, Cell Phone, Fax Service: $100 per month +
Some of these expenses you are already paying for, like a cell, or maybe internet, but keep in mind they are business expenses as soon as you start working from home. However, the IP phone and Fax service are often bundled together and only about $25 per month. They are more for convenience and being able to separate your personal life from your business, but well-worth the money if you can afford it.
Office Supplies: $50+ per month
I know, I know… $50 per month seems high for office supplies. You need to sit and think about what all you actually need. I know that I go through a lot of stamps, paper, pens, tape, envelopes, and that is just the basic office supplies. If you are printing agreements, verifications, or anything you need a hard copy of then you will need a printer/scanner/fax. You will use ink for that printer, then you have to think about your business computer. Sure, you can get away with using your personal computer for a little while but you are mixing your livelihood with your personal and that could spell danger for your business later on. All of these are the tools needed to run a professional appearing business and it all adds up.
Vendor Compliance: $40 – $80 per management company that requires it (There are quite a few)
Some properties require you to be a member of a service like Vendor Cafe, Compliance Depot, or RMIS, just to name a few. These require an annual membership fee and if you are with a broker they are usually the one to take care of these expenses. If the broker does not, then you are responsible for these expenses yourself. Buckle up and pay because there are a lot of properties that you want to work with that require these.
These are the expenses you can expect to encounter in your first year and so on while trying to startup an apartment locating business. Most of you are aware of some of these expenses, but I hope this article was helpful in shedding light on a few other’s that you may not have thought of. I did not include office space because to be honest I would not recommend a startup opening an office location unless you are planning on a high walk-in traffic location, and that expense would be impossible to forecast for you accurately, so how about this, EXPENSIVE.
Finally, a plug for Spirit Real Estate Group. If you are wanting to avoid most of these costs, then Spirit can help you get an apartment locating business up and running fast and affordable. We handle all of the administrative side of the business which includes invoicing, collections, vendor compliance, and much more, so you can focus on just leasing. If you would like to see more details on that then check out the Apartment Locator Sponsorship page.