Looking for more advice? Check out Inman’s New Agent Essentials.

This article was last updated June 14, 2022.

If you’re pursuing a career in real estate, you’re fortunate enough to be in an industry where there is no financial cap, with unlimited earning potential in-store.

It’s a given that finances will be top-of-mind as you get situated, so creating a financial guidebook will hold you accountable and avoid long-term stress. Most real estate agents have a commission-based income with revenue fluctuating each month.

Establishing a comprehensive budget is paramount to staying afloat and will allow you to begin investing in your retirement from an early age.

Knowing how to budget is an essential skill in any career, and there are five expenses one should be prepared to set money aside for when starting out. Keeping these expenses in mind will allow you to thrive in the long term and navigate financial obstacles that happen along the way.


Real estate is different from other industries where one has a W-2 and taxes are taken out of your paycheck. In real estate, you are an independent contractor responsible for calculating what you owe the government each quarter.

Make sure to talk to your accountant and discuss a realistic amount to use from each paycheck for your taxes.

Pro tip: We recommend setting aside between 25 percent and 35 percent of every commission for taxes. Although you might not have to pay the entire amount, it’s always better to save more than not have enough in savings.


One expense that might seem obvious, but people always forget about, is transportation, and with gas prices, it’s definitely a factor to consider early on.

As a real estate agent, you are always out in the field driving from listing to listing and meeting with new clients, so it’s important to set aside money each month for gas, car washes and other transportation-related expenses.

Pro tip: Be prepared to fill up your gas tank at least once a week and to get monthly car washes (or as often as needed to ensure your car’s appearance matches your own).

Business expenses

When starting out in real estate, you will have to take pre-licensing courses and pay license and exam fees to get certified as an agent.

For example, in California, the license fee is $245, and there is also a $60 examination fee, not including the costs for courses and textbooks as you prepare for the test.

The good news is, in California, once you pass the state exam, you won’t have to worry about these expenses and retaking the exam for another four years. Look into your state’s licensing costs and requirements, and add those to your expense list.

Pro tip: Another expense to keep in mind is subscriptions to top real estate and business publications, such as The Wall Street Journal, Inman, Financial Times, The New York Times and others, which can cost more than $100 a year. These subscriptions will allow you to stay on top of trends and news and position you as a market expert for your clients — which is worth the investment.

Your clients looking to purchase a new home are staying up to date on current events, which means you absolutely should too.


Marketing is an essential tool to grow your business and is worth every penny. With thousands of stunning and unique homes on the market, it’s important that you invest in marketing to make sure your client’s home gets the love and buzz it needs to stand out.

Successfully marketing your business will lead to new clients, new listings and a steady stream of income.

This means effectively advertising your services through social media, print and digital advertisements, signage, events and more.

For example, a color print advertisement for “Hot Property” in the Los Angeles Times, the No. 1 news platform in Southern California, starts at $570 and reaches more than 358,000 people across the city.

Pro tip: Once your business begins to really flourish, be sure to set aside a budget for a marketing expert on your team. They can handle the creative side, giving you more time to devote to the business and to your clients.


Once you’ve budgeted for the four categories above, the next step is to allocate a certain amount of your income for investments, your retirement fund, cryptocurrency, stocks or your own real estate purchase. It’s never too early to plan for retirement, and the sooner you can set money aside, the better.

Pro-tip: We recommend downloading an app such as Mint, a free, all-in-one, tool that allows you to manage both personal and business expenses through an online interface. The app also sends updates as you hit certain goals, which is a great way to be held accountable as you’re starting out.

James Harris is a director at The Agency in Los Angeles. Connect with him on Instagram. David Parnes is a director at The Agency in Los Angeles. Connect with him on Instagram

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