Understand what expenses to budget for as you run your real estate business.

Most real estate agents are considered independent contractors, and therefore run their own business.  As a business owner, it is necessary to have an understanding of your budget or to use a budget model to track your income and expenses.

The below list is a starting point for understanding what annual, monthly, or transactional expenses you need to consider:

Initial Investment Costs

Pre-licensing Course
State Licensing Exam
License Application

Annual Operating Expenses

Local Real Estate Board Dues
REALTOR Dues
Broker Renewal Fee
E&O Insurance
Education/Seminars
Electronic Lockbox Key
Lockbox
Business Cards
“For Sale” Signs & Posts
“Open House” Signs & Posts
Sign Riders (ie: “Sold!”)
Membership Subscriptions
Website Maintenance
Domain Names
Marketing/Advertising

Monthly Operating Expenses

Broker Fee/Dues
Desk/Office Space
Promotional Items
Holiday Gifts
Postcards/Mailings
Postage
Copies
Office Supplies

Transactional Expenses

Client Gifts
Flyers/Brochures
Postcards/Mailings
Advertising

See which, if any, of the above listed items your sponsoring broker will provide.  Understanding both your commission income and expenses will help you create a budget so you can develop a more predictable idea of what your monthly and annual income will look like.