Attention Investors: Is a Real Estate License Worth Having?
Real estate investors may question whether or not it’s worth having a real estate license. Generally, when acting as a principal in connection with the buying and selling of real estate, it’s not required. However, having a real estate license creates opportunities. Is it worth the time and money?
Real estate investors are always looking for a competitive edge. Whether it’s reading up on the latest resources, joining social groups, or attending seminars, great investors do what it takes to succeed. A common question those in real estate ask has to do with licensure. Many ask: “is it worth getting my real estate sales license?”
While a real estate license isn’t required for investing, figuring out if it’s worth having is certainly a loaded question. Let’s look at if a real estate license is worth having for any investor.
The benefits of having a real estate license
Understanding why a real estate license is helpful is a great starting point. It gives you a clear idea of how you can integrate the license into your investment activity. Any investor pursuing their real estate license will have certain challenges as well. As such, it’s important to weigh out the pros and cons and decide if it suits your goals and preferences.
Access to the Multiple Listing Service
Non-licensed investors depend on real estate agents or manually sifting through hundreds of deals every week on Zillow. When you get your real estate license, you can get access to h the Multiple Listing Service (MLS), which is a database of listings established by cooperating real estate brokers. This will help you find deals faster and speed is important to any real estate investor.
Direct access to the MLS also means you’re contacted first when a listing hits the market. This gives you the opportunity to act before your non-licensed competitors who don’t have MLS access. Additionally, you won’t need to rely on agents to refine your search.
An advantage to having your real estate license is the amount of new contacts you can meet. The real estate industry has specialists abounding. Having your license and working at a brokerage is an easy way to build relationships. Other real estate agents are great networkers and will have people across the business in their orbit. Connecting with real estate agents along with visibility in the office make it easier to cross paths with:
- Licensed contractors
- Home inspectors
- Real estate attorneys
- Other investors
- Insurance agents
- Interior designers
Having your real estate license connects you with all sorts of real estate professionals. Not only do they give you advice, but they can help you find deals and connect you with even more people. It’s essential to surround yourself with people who have similar goals in mind to you.
Always keep the art of reciprocity in mind. Just as you’re looking for new connections, others in the industry will be as well. If you have your license, you can also connect people from your office with other members of your network. By adding value, there’s a good chance that you’ll receive value back!
Close deals yourself
Investors usually have a trusted real estate agent that is an expert in a certain area. Real estate agents can get thousands of dollars in commission after a sale. With your real estate license you can list properties on your own and save money on comissons. Even if you sold a few properties , you would save on closing costs. Having a real estate license means this money saved could be reinvested back into your portfolio.. You’ll have the knowledge to handle this process on your own if you’re starting out and don’t wish to scale up yet.
The challenges of having a real estate license
Understanding if a real estate license is worth having for any investor means that you have to analyze the cons too. There are clearly reasons why many investors don’t have licenses. Many on this side of the debate believe that time and money can be better spent elsewhere.
This is the main reason that scares people away from obtaining their real estate license. From your prep courses to exam fees, getting your license can be costly. It often costs money just to get your license and take the required trainings. Afterwards, you still have to pay annual fees to keep your license. Though this varies state to state, it’s something you need to be aware of.
You also have to shell out money for MLS access, board membership and fees, and other subscriptions. While you have fantastic investing resources at your disposal, it’s going to cost you a premium to keep utilizing it. When you list properties for sale, you cover marketing costs yourself. That means that it cuts into your commission savings anyway.
Time and effort
Balancing your busy schedule while prepping for your real estate license is a stretch for many. There are requirements in place and a certain amount of hours that you have to spend studying the course.
Obtaining your real estate license involves filling out an application along with general requirements. Once your application is approved, your course load depends on which state you live in. Each state is different, so be sure to check your local requirements. Generally speaking, you need to complete a course and take a real estate license exam. Failure to pass means that you’ll have to prepare, wait a certain amount of time, and take the test again.
Even if you pass the test, you may have lost hours that could have been spent finding deals. As you consider this option, you should ask yourself “is the time and effort worth it?”
As you can see, the hoops you have to jump through are challenging and it’s going to take plenty of dedication before you are licensed. If you’re determined to make a living as a real estate agent, it may be worth it to you.
The potential commission you’d be making could serve as a solid return on investment of your money, time, and effort. However, some investors might run the other way and keep doing what they are best at.
Is having a real estate license worth having? It’s going to depend on where you’re from and how you value the resources of a license.As an investor, you may prefer to find deals on your own, off-market. Sundae’s marketplace connects investors with homeowners, and provides powerful resources to cut down on your time spent on research. Find your perfect property, with all of the right information in one spot so you can invest without a real estate agent.