{"id":89041,"date":"2019-04-27T05:00:34","date_gmt":"2019-04-27T11:00:34","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=89041"},"modified":"2021-03-16T12:26:30","modified_gmt":"2021-03-16T18:26:30","slug":"cut-costs","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/cut-costs","title":{"rendered":"6 Simple Ways to Cut Costs in Your Real Estate Business"},"content":{"rendered":"<p>Real estate, like any business, requires low overhead to make high profits. You must, of course, spend money to make money, but your spending shouldn\u2019t be in excess. It\u2019s easy to let your regular costs and expenses get out of hand by justifying them as investments with the potential of greater profits.<\/p>\n<p>However, you may be putting more into it than you should be. As you look for ways to cut spending in your business, consider the following tips.<\/p>\n<h2>6 Ways to Easily Costs in Your Real Estate Business<\/h2>\n<h3>1. Purchase more basic equipment.<\/h3>\n<p>You should invest in technology to further your business. Whether you\u2019re investing, managing, or selling real estate, digital and technical access will be a huge benefit. However, you don\u2019t need to spend an arm and a leg on your technology.<\/p>\n<p>For example, rather than purchasing the latest iPhone for your business endeavors, you might look into an older, but high-functioning different phone. Even if it\u2019s an older model, but it will likely have all the capabilities you need for hundreds of dollars less. You could also purchase a standard laptop rather than an expensive MacBook or Surface Pro.<\/p>\n<p>Reducing the initial cost of technology for your real estate office will mean positive growth for your business.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-84143\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2016\/12\/build-relationships.jpg\" alt=\"build-relationships\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2016\/12\/build-relationships.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2016\/12\/build-relationships-300x144.jpg 300w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<h3>2. Use freebies.<\/h3>\n<p>There are a variety of free tools available to supplement your paid tools, including dozens of apps, websites, software, and other resources to promote your business and make your life easier. Here are some of the most popular:<\/p>\n<ul>\n<li><em><strong>Social media:<\/strong><\/em> Marketing and promotion<\/li>\n<li><em><strong>Hubspot.com:<\/strong><\/em> CRM<\/li>\n<li><em><strong>Google Drive: <\/strong><\/em>File sharing and cloud storage<\/li>\n<li><em><strong>Trello.com:<\/strong><\/em> Project management and organization<\/li>\n<li><em><strong><a href=\"https:\/\/www.biggerpockets.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">BiggerPockets:<\/a><\/strong><\/em>\u00a0Publication and information sharing<\/li>\n<\/ul>\n<p>Look into all the free options at your disposal to streamline your business and reduce overhead.<br \/>\n<em><br \/>\n<strong>Related:<\/strong> <a href=\"\/renewsblog\/tenant-turnover-solution\" target=\"_blank\" rel=\"noopener noreferrer\">Tenant Turnover Can Wreck Your Profits: Here\u2019s the Simple Solution to This Costly Issue<\/a><\/em><\/p>\n<h3>3. Take advantage of tax breaks.<\/h3>\n<p>Many new real estate investors are unaware of the real estate tax breaks available to them. <a href=\"\/renewsblog\/2015\/05\/20\/tax-benefits-real-estate-investing-rental-properties\/\" target=\"_blank\" rel=\"noopener noreferrer\">There are too many tax breaks<\/a>\u00a0to list in one article, but here are the most prominent:<\/p>\n<ul>\n<li><em><strong>Deductions:<\/strong><\/em> You can deduct nearly all the expenses associated with your real estate investments and business. Your mortgage, loan interest, office expenses, and other real-estate activities fall into this category.<\/li>\n<li><em><strong>Capital gains:<\/strong><\/em> Any profits made, both short term and long term, can be subtracted from what you owe on your taxes.<\/li>\n<li><em><strong>Depreciation:<\/strong><\/em> On the other hand, if your property decreases in value, you can subtract your losses. The same goes for expensive office supplies that can be deducted over a few years.<\/li>\n<\/ul>\n<p>These are the three primary ways that you can reduce your tax burden. Discuss other options with your accountant.<\/p>\n<h3>4. Find cheap labor.<\/h3>\n<p>For most businesses, real estate included, labor is an expensive cost. Finding cheaper labor doesn\u2019t mean hiring inexperienced workers or doing everything yourself. You\u2019ll need a few experienced people on your team, but there are a few ways you can reduce the labor burden.<\/p>\n<ul>\n<li><em><strong>Hire interns: <\/strong><\/em>Interns are free or cheap and can do much of the grunt work that would otherwise fall on your shoulders.<\/li>\n<li><em><strong>Use automation tools:<\/strong><\/em> By automating social media, email marketing, finances, and other practices, you can reduce your responsibility and increase efficiency in the office.<\/li>\n<li><em><strong>Do more yourself: <\/strong><\/em>You shouldn\u2019t feel overwhelmed with all your responsibilities, but adding a few extras to your daily tasks can help your budget. Just make sure you don\u2019t overwork yourself.<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-83425\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2016\/11\/tenant-screening-tips.jpg\" alt=\"tenant-screening-tips\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2016\/11\/tenant-screening-tips.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2016\/11\/tenant-screening-tips-300x144.jpg 300w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<h3>5. Make eco-friendly updates.<\/h3>\n<p>Sustainable updates provide an excellent way to cut costs on your regular expenses. Not only are they good for the environment, but they\u2019re typically more affordable to operate in the long run. To cut costs and reduce your carbon footprint, here are some eco-friendly updates you can make:<\/p>\n<ul>\n<li><em><strong>Sustainable landscaping:<\/strong><\/em> Usually, this involves a yard and garden that needs less watering. Native and water-resistant plants will grow beautifully without the need for excess hydration.<\/li>\n<li><em><strong>Smart tech:<\/strong><\/em> Research from Inman.com shows that smart technology is one of the most sought-after features in the housing market. Homes that use smart lighting, thermostats, and other tech can reduce utility bills and increase tenant satisfaction. For the sake of money, you shouldn\u2019t replace everything with smart tech all at once; however, you can replace a broken thermostat and make small updates on the way.<\/li>\n<li><em><strong>Regular maintenance:<\/strong><\/em> Keep your properties well-maintained. Old windows and crumbling siding can reduce efficiency and lead to other serious problems like water damage. You\u2019ll save more in the long run by investing time and money into maintenance and repairs.<\/li>\n<\/ul>\n<p><em><strong>Related:<\/strong> <a href=\"\/renewsblog\/hidden-rental-costs\" target=\"_blank\" rel=\"noopener noreferrer\">3 Hidden Costs That Can Tank Rental Property Profits<\/a><\/em><\/p>\n<h3>6. Borrow wisely.<\/h3>\n<p>In real estate, you\u2019re constantly looking into new properties and updating your existing ones. For that, you\u2019ll need a loan, but you must be careful when borrowing the money. Don\u2019t forget about the interest rates and payments that come with loans. If you\u2019re not careful, you\u2019ll pay thousands extra on your loans.<\/p>\n<p>Go into the loan process with eyes open. Look for reduced interest rates and longer loan repayment periods. This will limit what you pay in the long run.<\/p>\n<p>Just because\u00a0you\u2019re dealing with some of the most expensive assets in the world doesn\u2019t mean you have to overspend in the process. You can increase your profits and decrease stress by taking advantage of these simple, but powerful tips.<\/p>\n<p><a href=\"https:\/\/www.biggerpockets.com\/real-estate-investment-calculator\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-91220\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-02.jpg\" alt=\"\" width=\"700\" height=\"85\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-02.jpg 700w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-02-300x36.jpg 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/a><\/p>\n<p><em>Are there any steps you&#8217;ve taken not on this list to decrease costs in your business?<\/em><\/p>\n<p><strong>Be sure to leave a comment below!<\/strong><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Just because you\u2019re dealing with some of the most expensive assets in the world doesn\u2019t mean you have to overspend in the process. Real estate can demand low overhead and still make high profits. As you look for ways to cut spending in your business, consider these tips.<\/p>\n","protected":false},"author":59534,"featured_media":109598,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4241],"tags":[],"class_list":["post-89041","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-business-management"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/89041","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/59534"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=89041"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/89041\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/109598"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=89041"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=89041"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=89041"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}