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Category: Real Estate

We’ve pulled together the Top 10 business and accounting posts for realtors, brokers and property mangers and complied them all in one place. Here at Vyde, we get that work keeps you busy – you’re in the industry of helping families, couples, and individuals make a fresh start with a new home. That said, there’s a lot going on behind the scenes as well – phone calls, setting up appointments, researching listings, and making new contacts – and that leaves little time to focus on bookkeeping or financial strategy.

These posts are filled with the expert advice we share with our clients who work in your industry. Our clients have implemented new ideas and put in processes and we’ve enjoyed hearing about the successes that come from having a strong bookkeeping and financial strategy for their business. So grab a pen and paper and take a minute to read through the posts that interest you most. We’d also love to hear your thoughts and successes in the comments below.

Top 10 Business & Accounting Posts for the Real Estate Industry

  1. How do I figure my Quarterly Estimated Taxes? For Realtors, Real Estate Brokers, and Property Managers
  2. 6 Ways to Save Time and Money on Bookkeeping and Accounting as a Realtor or Real Estate Agent
  3. How to Calculate Self-Employment Taxes for Real Estate Professionals & Agents
  4. How to Legally Structure a Real Estate Partnership or Agency
  5. How to Track and Separate Business & Personal Expenses as a Realtor or Real Estate Agent
  6. The Top 10 Tax Deductions for Realtors & Real Estate Agents
  7. Top 4  Tips on Tracking Mileage and Deducting Vehicle Expenses as a Real Estate Agent
  8. How to Develop a Succession Plan for Your Real Estate Partnership
  9. What You Can and Cannot Deduct for Advertising Your Real Estate Business
  10. 4 Accounting Mistakes that Put Your Small Business at Risk

Have more questions about bookkeeping and taxes when it comes to your real estate business? We’d love to chat. You can contact us here. 

Looking to improve your real estate business? Learn about tax deductions, creating a successful partnership and more geared to real estate professionals.

Running your own business is hard work, especially when you’re focused on helping other people find their dream homes. The last thing you need hanging over your head is the worry of small business bookkeeping and accounting. Knowing the best financial practices for realtors, real estate agents, real estate brokers and property managers can help you to do things right the first time and end up saving you time, money and a headache.

These 10 articles will give you a great place to start and we’re always here to help if you have any more questions about your business.

How to Track and Separate Business and Personal Expenses as a Realtor or Real Estate Agent

The line between business and personal are easily blurred, especially when you use things like your car or cellphone for both. Find out the best practices for separating your personal expenses and your business expenses.

How to Legally Structure a Real Estate Partnership or Agency

Do you know the difference between a general partnership, limited partnership and a limited liability company? Find out which is the best fit for you and how to go about setting it up.

The Top 10 Tax Deductions for Realtors and Real Estate Agents

Running your own business is expensive; make sure you know how to get the deductions you are entitled to. When you know what deductions to look for you can make the best use of your time and money.

What You Can and Cannot Deduct for Advertising Your Real Estate Business

The best way to get your name out there as a realtor is through advertising. You know you can deduct your business cards and Internet advertisements, but what about giveaways or promotional products?

Top 4 Tips on Tracking Mileage and Deducting Vehicle Expenses as a Real Estate Agent

You have a lot more vehicle deduction options than just counting milage from driving clients around. Find out the best ways to get the most money for your miles.

6 Ways to Save Time and Money on Bookkeeping and Accounting as a Realtor or Real Estate Agent

Bookkeeping and accounting are one of the most important aspects of running your own business. Do you know the difference between the two and are you keeping up?

How to Calculate Self-Employment Taxes for Real Estate Professionals and Agents

One of the best parts of being self employed is being able to work as much or as little as you want; however, making sure you’re taking out your own taxes isn’t as alluring. Make sure you pay Uncle Sam right the first time around.

How Do I Figure My Estimated Quarterly Taxes? For Realtors, Real Estate Brokers, and Property Managers

The IRS considers realtors, real estate agents, brokers, and property managers as self-employed, and therefore; are subject to pay quarterly taxes. Do you know how to calculate them?

How to Develop an Exit Strategy for Your Real Estate Agency Partnership

While things with your real estate partner may seem to be going great right now you never know what life is going to throw at you. Take time to plan an exit strategy for both your benefits.

How to Develop a Succession Plan for Your Real Estate Partnership

As your business grows and develops you should have a plan that helps you assess who could become a leader within your partnership. Consider all who will be affected by your decisions.

 

There’s nothing better than being able to save a little extra time and money as a real estate agent. Finding an efficient and cost-effective way to take care of your real estate bookkeeping and accounting is imperative to doing just that.

First, let’s make a distinction between bookkeeping and accounting. Sometimes the terms are used interchangeably, but that is incorrect. Bookkeeping and accounting are two parts of the same financial cycle.

Bookkeeping involves the recording of daily transactions for your business including:

  • Posting debit and credit card expenses
  • Recording all financial transactions
  • Issuing invoices
  • Balancing bank accounts and checkbooks
  • Payroll duties

Accounting is a higher-level process that takes all of your bookkeeping information and makes sense of it by creating financial documents that give you insights about your business. Accounting includes:

  • Preparation of financial statements
  • Profit and loss reports
  • Financial analysis of the company—operational costs, determining where money can be saved, and analyzing financial data over time
  • Filling out small business tax forms and returns.

So how can you save time and money on these two time-intensive tasks as a real estate agent or realtor? Here are a few tips to help you out:

  • Do it right the first time.

If you’re managing your real estate business bookkeeping and accounting yourself, don’t take shortcuts thinking you’ll save time or money. Turn bookkeeping into a regular habit, just like checking your email each day or setting weekly goals for yourself. Decide how often you’ll take care of bookkeeping tasks—ideally at least once per month, and set aside time specifically for this task

  • Keep all records.

The golden rule for any accurate small business bookkeeping. Whether you prefer hard copy receipts or everything digital, find the quickest, easiest, and safest place to keep your receipts and financial records. Keep a folder or envelope in your office, car and/or wallet where you put all your business receipts. If you prefer a digital method, you can take photos of receipts and upload them to an app such as Expensify or Hello Expense.

  • Familiarize yourself with common accounting terms.

Accounting jargon can sometimes seem like another language, especially if you’re not familiar with business accounting. Terms like accounts receivable, balance sheet, cash flow, ledger, accrual, and Return on Investment aren’t words that often grace everyday speech. Learn the basic business accounting terms and what they mean, here.

  • Keep business and personal accounts separate.

Nothing creates a financial mess at the end of the year quite like personal or business expenses charged to the wrong account. By keeping your realtor business and personal accounts separate, your bookkeeping will go much more smoothly and you’ll be able to keep your business’ professional image in tact. For end-of-year accounting, you will need to review your personal account for possible business deductions such as portions of your phone bill or even your mortgage payment. Meanwhile, keep small business purchases on a personal account to an absolute minimum.

  • Invest in bookkeeping software that’s right for you.

If you plan to manage your own business accounting and bookkeeping, you’ll likely end up needing more features than an excel spreadsheet can provide. Research several types of accounting software and find one that fits your needs. Some are tailored to realtors specifically, but many realtors find success using general accounting software such as Quickbooks. Remember, you can always try our Quickbooks alternative.

  • Hire an accountant.

If you really wanted to, you could probably tackle any accounting or bookkeeping question that came your way. However, most realtor and real estate agents find that it’s not worth their time to spend hours each month doing bookkeeping when they could be focused more on the money-making aspects of their business. Instead of trying to muddle through on your own, you’re better off to hire a professional accountant to take care of your small business accounting needs. Not only will an accountant save you time, but they can also save you money by finding more business deductions during tax season, catch any accounting errors you may have made or overlooked, and advise you on how to save or invest your money. Vyde provides bookkeeping and accounting services for realtors and real estate agents, and unlimited accounting advice from real CPAs, all for less than $100/month. Give us a call today, we’d love to discuss your real estate agent accounting questions.

 

Other posts that might interest you:

How to Legally Structure a Real Estate Partnership or Agency

How to Track & Separate Business and Personal Expenses as a Realtor or Real Estate Agent

The Top 10 Tax Deductions for Realtors and Real Estate Agents

What You Can and Cannot Deduct for Advertising Your Real Estate Business

Top 4 Tips on Tracking Mileage and Deducting Vehicle Expenses as a Real Estate Agent

How to Calculate Self-Employment Taxes for Real Estate Professionals and Agents

How Do I Figure My Estimated Quarterly Taxes? For Realtors, Real Estate Brokers, and Property Managers

How to Develop an Exit Strategy for Your Real Estate Agency Partnership

How to Develop a Succession Plan for Your Real Estate Partnership

 

As a real estate agent or realtor, it’s easy to get your person and business finances tangled up. Keeping your finances separate will make it easier to find deductions during tax season, grow your business and stay organized.

Here are 6 ways to keep your personal and business finances separate as a real estate agent or realtor:

  1. Set up separate bank accounts.

    If you haven’t done this yet, it’s never too late. Set up a business account then, when tax time comes, you’ll only have to review one account for deductions and expenses. It may be hard to differentiate between business and personal purchases made through your personal account. This can be especially difficult months after the fact. Not only is having separate accounts tax smart, it improves overall organization of your business life.

  2. Get a business credit card.

    Much like a separate bank account, a business credit card provides records of purchases. If you were to be audited you will have proof of business purchases. You shouldn’t maintain a balance on your business credit card. However, if you do, the interest rate is deductible as a business expense. Building up a line of credit for your real estate business that is separate from your personal credit is an added benefit.

  3. Keep meticulous track of shared expenses.

    If you’re working from your car or home office, as many realtors and real estate agents do, you might have an overlap in expenses. For example, you can claim a home office, a portion of your mortgage payment, electric bill, or other utilities as tax deductions. You can also claim your cell phone bill as a tax deduction. While it might be better financially to have a separate business phone, it’s not always feasible for a real estate agent. In instances like these, keep all bills and receipts and be diligent in tracking these overlapping expenses. Highlight business expenses on your receipts or  separate portions of transactions onto two separate debit cards. Keeping track along the way will help you get the most bang for your buck during tax season. You can calculate what percentage of these bills exactly is deductible when you prepare your taxes, but you need a record to go off of.

  4. Understand what is a business expense and what isn’t.

    Having separate bank accounts and credit cards for your personal and business expenses makes this step infinitely easier. You may be less tempted to make a business purchase if you have to actually put the item on a business credit card. You may think twice about what qualifies as a “business lunch” or “business travel” as well. Don’t plan to put a business purchase on your personal card and reimburse yourself later. Keep in mind that food and entertainment for business can be deducted at 50% on your taxes, but only if a serious business conversation took place before, during or after the occasion.

  5. Set your salary and stick to it.

    If you own your own real estate business and maintain separate business and personal accounts, you’ll need to set yourself a salary to keep things organized. You’ll find it easier to stay on budget if you write yourself a check from your business to your personal account for the same amount each month.

  6. Consult a professional.

    If you have questions about what qualifies as a business expense or what portion of a bill for your home office is tax deductible, contact a professional accountant to help you clarify. An accountant will also be able to help you keep your expenses separate and organized all year long.

Maintaining an organized small business bookkeeping system as a real estate agent can save you a lot of time and money during tax season. Keep your business organized and professional by streamlining this process or hiring a professional to help you out.

Other posts that might interest you:

How to Legally Structure a Real Estate Partnership or Agency

The Top 10 Tax Deductions for Realtors and Real Estate Agents

What You Can and Cannot Deduct for Advertising Your Real Estate Business

Top 4 Tips on Tracking Mileage and Deducting Vehicle Expenses as a Real Estate Agent

6 Ways to Save Time and Money on Bookkeeping and Accounting as a Realtor or Real Estate Agent

How to Calculate Self-Employment Taxes for Real Estate Professionals and Agents

How Do I Figure My Estimated Quarterly Taxes? For Realtors, Real Estate Brokers, and Property Managers

How to Develop an Exit Strategy for Your Real Estate Agency Partnership

How to Develop a Succession Plan for Your Real Estate Partnership

 

You just formed a real estate partnership. As hard as it is to imagine an ending to your newly formed venture, an exit strategy belongs in every business plan. Adding an exit strategy to your real estate partnership ensures protection for both partners. It will also reinforce that the business venture is a professional relationship, not a personal one.

There are several possible reasons for needing an exit strategy for your real estate partnership.

How To Get Out of a Real Estate Partnership

Here are a few possibilities to consider when developing an exit strategy with your real estate business partner.

  • Resignation. Your exit strategy should clearly define what happens if one partner decides to resign from the business. How will the partners be compensated if one walks away? What will happen if the business is sold or acquired by someone else?
  • Disagreement. Fighting and disagreement are one of the most unpleasant ways to dissolve a partnership, yet surprisingly common. If the only solution is to split, then partners should know ahead of time how they will handle things.
  • Financial Conflict. Differing ideas on how to spend, distribute, or invest money made in a partnership can be a tricky task. Involving an accountant in the development of your exit strategy for your real estate partnership can ensure that business finances run smoothly, even if the partnership dissolves.
  • Merging or Selling. The exit strategy for your real estate partnership should address how to handle the business if it grows, either through merging or selling.
  • Buy-out. A good exit strategy includes the possibility of one partner wanting to buy the other partner out. Planning ahead for a buy-out will create a smooth financial transaction.
  • Death. Details should include what the financial compensation package should be for the surviving family members. You should also decide who will own the deceased partner’s portion of the business. Will the new stakeholder continue in the business? The new stakeholder and surviving partner can decide this later.
  • Divorce. Your exit strategy should also include guidelines for what happens if one of the real estate partners gets divorced. If you don’t anticipate the possibility of divorce, then you may find yourself with an ex-spouse as a new partner.
  • Disability. An exit strategy should include clear guidelines about what path the business will take if one partner becomes disabled. This part of the strategy can be the most difficult to develop because while a partner may be disabled—mentally, physically, or even financially—they still have a stake in the business. Disability points to discuss should include transfer of ownership, short and long-term disability payments, and finally, health insurance coverage for the disabled partner and his or her dependents.

 

exit strategy for your real estate partnership

Why you absolutely need an exit strategy for your real estate partnership.

A clearly defined exit strategy in a real estate partnership does more than just determine answers for the “what if” questions. It provides peace of mind for both partners. It ensures a fair outcome when the partnership comes to an end. Have your accountant help you draft and/or review your exit strategy for your real estate partnership.

Along with having a plan for exiting your partnership, you should also create a succession plan.  Succession planning identifies and develops internal and external individuals to potentially fill key business leadership positions in the future.  This makes sure that individuals are prepared for the future and gives peace of mind to all players that a plan is in place.  Read more here about succession planning and how a good accountant and virtual bookkeeper can help with this important part of your real estate business.

 
Other posts that might interest you:

How to Legally Structure a Real Estate Partnership or Agency

How to Track & Separate Business and Personal Expenses as a Realtor or Real Estate Agent

The Top 10 Tax Deductions for Realtors and Real Estate Agents

What You Can and Cannot Deduct for Advertising Your Real Estate Business

Top 4 Tips on Tracking Mileage and Deducting Vehicle Expenses as a Real Estate Agent

6 Ways to Save Time and Money on Bookkeeping and Accounting as a Realtor or Real Estate Agent

How to Calculate Self-Employment Taxes for Real Estate Professionals and Agents

How Do I Figure My Estimated Quarterly Taxes? For Realtors, Real Estate Brokers, and Property Managers

How to Develop a Succession Plan for Your Real Estate Partnership