Real estate & rental
Real Estate Agent Business Expenses Calculator
Totals agent business expenses, which are larger than most agents track.
Result
Overhead is what the business costs whether or not you work. Wages for people who are on jobs belong in job cost instead, and counting them here overstates overhead and underprices everything.
Get a Free Business AuditHow the calculation works
Each category totalled annually and monthly: brokerage and franchise fees, association and multiple listing service dues, licensing and continuing education, marketing and advertising, vehicle costs, technology and customer management systems, insurance, and professional services. Divided by transactions it gives the expense load each closing has to carry.
What moves the number
- Dues and fees, which are fixed regardless of production.
- Marketing, which is the largest variable line for most agents.
- Vehicle use, which is substantial and deductible.
- Technology subscriptions, which accumulate.
Where this one goes wrong
Much of the expense base is fixed regardless of production, which means a quiet year costs nearly as much to operate as a busy one and the expense per transaction rises sharply. Knowing the fixed figure tells an agent what a slow quarter actually costs. Vehicle expense is the item most often undertracked, and the deduction requires contemporaneous records of business mileage rather than a year-end estimate, which the IRS publishes the requirements for.
Before you quote
- Separate fixed costs from variable, and know the fixed total.
- Log business mileage contemporaneously, not at year end.
- Audit technology subscriptions annually.
Where the rules come from
Questions
About this calculator
What does a quiet quarter cost an agent?
Nearly as much as a busy one, because dues, fees, licensing, insurance and most technology are fixed regardless of production. Knowing the fixed monthly figure is what makes the cost of a slow period visible rather than abstract.
How should vehicle expenses be tracked?
With a contemporaneous log of business mileage, since the deduction depends on records rather than estimates. The IRS publishes both the standard mileage rate and the recordkeeping requirements, and a year-end reconstruction is the weakest possible position.
Where do agent expenses quietly grow?
Technology and lead subscriptions, which renew automatically and accumulate as each was adopted to solve one problem. An annual audit of what is paid for against what is actually used usually recovers a meaningful amount.
The formula
overhead rate = monthly overhead / monthly revenue
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How to use this calculator
- Premises per month ($). Enter your own figure; the page starts at $1,800.
- Office and management wages ($). Enter your own figure; the page starts at $5,200.
- Vehicle, showings and travel ($). Enter your own figure; the page starts at $2,400.
- Insurance and licensing ($). Enter your own figure; the page starts at $900.
- Software, phones and internet ($). Enter your own figure; the page starts at $450.
- Marketing and advertising ($). Enter your own figure; the page starts at $1,500.
The result updates as you type, so you can try a figure, see what it does to overhead per month, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Premises per month | $1,800 |
| Office and management wages | $5,200 |
| Vehicle, showings and travel | $2,400 |
| Insurance and licensing | $900 |
| Software, phones and internet | $450 |
| Marketing and advertising | $1,500 |
| Everything else | $700 |
| Monthly revenue | $38,000 |
What comes out
| Result | Value |
|---|---|
| Overhead per month main result | $12,950 |
| Overhead per year | $155,400 |
| Overhead rate | 34.1% |
| Cost of opening the doors | $588.64 |
Overhead runs $12,950 a month, 34.1% of revenue. Every working day costs $588.64 before anybody turns a wheel.
How sensitive the answer is
Holding everything else steady and changing only premises per month, this is what happens to overhead per month. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Premises per month ($) | Overhead per month |
|---|---|
| $900 | $12,050 |
| $1,350 | $12,500 |
| $1,800 example above | $12,950 |
| $2,700 | $13,850 |
| $3,600 | $14,750 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Premises per month ($)
- A money amount, starting at $1,800.
- Office and management wages ($)
- A money amount, starting at $5,200.
- Vehicle, showings and travel ($)
- A money amount, starting at $2,400.
- Insurance and licensing ($)
- A money amount, starting at $900.
- Software, phones and internet ($)
- A money amount, starting at $450.
- Marketing and advertising ($)
- A money amount, starting at $1,500.
- Everything else ($)
- A money amount, starting at $700.
- Monthly revenue ($)
- A money amount, starting at $38,000.
What the results tell you
| Result | What it is |
|---|---|
| Overhead per month | The headline result. A money figure. |
| Overhead per year | A money figure. |
| Overhead rate | A percentage. |
| Cost of opening the doors | A money figure. |
What is not in this number
Property figures here exclude the costs that decide whether a deal works: vacancy, maintenance, management, capital expenditure and the transaction costs at both ends. A return that looks strong before those frequently does not survive them.
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.