Click here for the free resource >>>> Real Estate Agent Financial Tracker
Picture this: it’s December 31. You’re getting those last minute business-related purchases in for deductions (because, duh.) You go into the new year with that familiar sense of “this year, I got it.” You start the year off strong, production wise. January showings turn into February closings. February leads turn into March commission checks. And then…
And all of a sudden you feel like you don’t really got this anymore. One of the two dreaded guarantees in life is due right around the corner and it’s time to figure out where all those receipts went, where all of your commission statements live, and wait a minute, did I pay for that client’s listing photos?
It’s tax time, my friends.
Remember last year when you said, and I quote, “Next year, I’ll be more prepared.” Now, I’m the first one to understand that the busy life of a real estate agent takes over and that tedious task of getting your finances together got pushed to the side.
I know, I know. It wasn’t for lack of trying! You’re really good at sales, not the systems stuff. A lot of real estate agents struggle with keeping this side of the business organized simply because they don’t have the right tools available to them. Without a solid system in place, keeping track of your finances is overwhelming. And when things get overwhelming, we tend to just… ignore them, right? (I know I’m not alone here or you probably wouldn’t be reading this post right now.)
I’m going out on a limb here to say that you didn’t get into real estate because you love accounting. Not that there’s anything wrong with accounting, but literally no one has ever told me that that’s the reason why they started this career. (And if you did, again, you probably wouldn’t be reading this post right now.) So the generic “make sure you’re tracking your income and expenses” advice that you get told over and over again is basically less than helpful.
So let’s break down the essentialsClick here for TL;DR
What do you need? Well, open up your spreadsheet of choice. Mine’s Google Sheets and my mind cannot be changed on that.
Once your new spreadsheet is open, change it from “Untitled Sheet” to whatever it is you want to call it – it just has to be anything other than “Untitled Sheet” because come onnnn, people.
And now, let’s make some tabs down at the bottom.
First up: Income. Here we’re going to put in detailed records of all of your income sources (buyer, seller, tenant, outbound referral), what the property address was, sale price, and closing date. Now continue to add commission percentage, GCI amount, and put in various tabs that your commission statement shows, like any bonuses, referral fees, deductions, concessions, admin fees, office fees, cap amount, etc. Add in a final column called “Net Income” where you can track how much you actually got paid from the sale.
Next: Expenses. This one is something you gotta stay on top of so you’re not left categorizing everything on April 14th until midnight. What I like to do is create a column for the date of the transaction, what card it was paid with, the category it should be attached to (like salary & wages, transportation, etc.) the transaction name, amount, a column for the receipt, and any notes you may have about it (like “I venmo’d Sally because she helped with my showings” so you know what’s what.)
And lastly, Profit & Loss. This is realllllly important because remember all of those December 31st purchases you made… were they necessary? Did you spend enough? But this tab needs to have a row for the months of the year and your income for each month calculated underneath. Then, do the same for expenses. Add up how much you spent in each month and all it to that cell. You can then subtract your expenses from your income to give you your net profit for each month, and then the same for the year.
Or, I could just give you mine
Now – I have a sneaky suspicion that you blew through those instructions because… you’re not going to do it yourself.
Especially not when I did it for you. And it’s free. Everything I just described above can be grabbed here, with super cool (read: nerdy) formulas that calculates the profit and loss for you because math is hard sometimes. Again, we didn’t get into real estate because we love accounting.
Grab it here – you (and your CPA) will be so happy you did!