February 5th, 2019
Real estate agents are notorious for negligence when it comes to retirement planning. Real estate coach suggests that new realtors should have a retirement plan for a safe future. Many realtors believe that the next year will be more profitable than the previous one; unfortunately, things might not turn out the way you planned. Having a financial plan is essential as it keeps the balance between your income, expenses, and savings for a comfortable retirement plan.
Understanding the Basics of the Retirement Plan
A real estate mentor will guide you on how to plan for your retirement. Start with treating all your real estate operations as a business. Make a budget for each quarter to manage your expenses with a focus on savings. The basic step in your retirement plan is to work on your personal and business expenses. Try to reduce them as much as you can. You can choose several retirement plans including putting your savings in a Simplified Employee Pension or SEP.
Buy Rental Properties
One of the many useful real estate tips includes purchasing rental properties as a step towards a comfortable retirement. Rental properties are high-income, including them as a part of your retirement plan allows you to have a steady income to support your lifestyle.
Help your tenants and encourage them to purchase a property from you, give your tenants tips on how to improve their credit rating to get a decent home. Along with a SEP account, renting out properties is a good option for retirement especially when the market is stable and promises considerable real estate growth.
Individual 401k Plan
Another option for a comprehensive retirement plan for real estate brokers is to choose the individual 401K plan. When you choose this particular retirement plan, you are unable to keep any employees other than your spouse. This is a good option for husband and wife realtors who are working as a team and does not rely on other employees.
Comparing the individual 401k plan with the SEP account indicates that the former allows for employer and employee contributions. On the other hand, the SEP account only permits contributions on behalf of the employer in real estate business.
Start Saving Early
Regardless of your real estate sales, you need to start saving money as early as possible. Instead of waiting for that highly profitable year to arrive or waiting for your personal expenses to reduce, it’s recommended to start saving right from the first profit.
You don’t have to save most of your income especially when the market is slow. On average, 5 to 10% saving on each deal will help you get a good amount upon your retirement. If you’re a young realtor say in your 30 then your real estate strategy should be to save at least 20% of your income for retirement.
To increase your sales, use your pool of contacts and spread the word about affordable properties. Offer consultation to clients on whether to rent a property or buy a decently sized home to increase your unique selling point.
Real estate coaching is essential if you want to be a successful realtor. Watch Our FREE Training for Real Estate Agents and Brokers here!