As either a seasoned or budding real estate investor, you may be asking yourself, “should I get my real estate license?”
Maybe you’ve heard about the benefits, and you are eager to save money on listing fees and gain access to the coveted MLS. But before you rush in and start studying for your real estate exam, take a look at the bigger picture to determine whether obtaining a real estate license is right for you.
Benefits of Getting a Real Estate License
Save Money on Commission
This might be the biggest draw for investors when considering getting their real estate license. The thought of not having to pay real estate agent fees seems like it spells big savings, but it can be helpful to break down the fees before getting excited.
As a buyer, you will never pay agent fees; both agents’ commissions are typically paid by the seller. If you are planning on buying a rental property and holding it to rent long term, this is not much of a benefit to you.
On the other hand, for real estate investors interested in flipping homes, getting a real estate license could be appealing as you will be selling homes frequently, and your real estate license will allow you to list your own property and collect the seller’s commission.
However, be sure you fully understand how much money you will be saving by getting your license as a real estate investor; it may not be as much as you think.
Real estate agent fees typically constitute 6% of the sale price and half of that goes to the buyer’s agent. Real estate agents must work under brokers and pay broker fees. Depending on your broker, this could be a flat fee, a percentage of your commission, or a combination of both. You can easily see how quickly the savings can be diminished.
Gain MLS Access
One of the major benefits of getting your real estate license as an investor includes gaining MLS (multiple listing services) access. While the MLS can provide valuable, comprehensive data when buying an investment property, if this is your main reason for getting a real estate license, you might want to reconsider.
Even as an agent, MLS access is not free. After jumping through the hoops to obtain your real estate license, you still have to pay for this benefit. Luckily, there are other options that provide you with the tools you need to become a successful real estate investor.
Mashvisor provides powerful real estate analysis tools that easily rival the value of MLS access. With Mashvisor’s real estate heat map, you can gain insight into specific neighborhoods and real estate markets. Between Mashvisor’s property finder and property marketplace, you can score the ideal investment property, even off market properties, and you can perform rental property analysis with the investment property calculator.
Having MLS access is not the only way to successfully find investment properties for sale, thanks to Mashvisor’s tools.
Related: Learn How to Find Rental Properties for Sale Using a Single Online Platform
Drawbacks of Getting a Real Estate License
The Time
Becoming a licensed real estate agent is no walk in the park. You will have to study up and spend a minimum number of hours taking a certification course. The time commitment can vary depending on what state you live in and can turn out to be upwards of 100 hours. This can translate into months of learning.
After you complete your studying, you must schedule a real estate exam and pass in order to be granted your real estate license. If you don’t pass the first time, this means more studying and re-taking your test.
For people who work full time and are pursuing a real estate license as an added luxury for their real estate investing career, the time commitment can be challenging.
The Cost
Depending on the length of time you must spend preparing for your exam and the local fees you will pay, the upfront cost of getting a real estate license can be steep. You must break down all of the expenses, including the costs to get licensed as well as the costs incurred to keep your license.
Here’s an estimate of the potential cost of becoming a realtor in California:
- $350 for a pre-licensing course
- $60 exam fee
- $49 fingerprinting fee
- $245 licensing fee
- $25-$500 per month to join a brokerage
- $900 a year for MLS access, board fees, state dues, etc.
The upfront costs of getting a real estate license are certainly not cheap and neither are the ongoing costs associated with being a real estate agent. Combined with the time commitment, obtaining a real estate license is a serious decision and investment.
Should I Get My Real Estate License as an Investor?
Should I get my real estate license?
Is getting a real estate license worth it?
The answers to these questions lie in your personal circumstances and preferences.
After reading about the cost and time commitment involved, you may be asking yourself, “why should I get my real estate license?” The truth is, there are many reasons to become a realtor. If you are passionate about the world of real estate and are seeking a career change, you might want to consider getting your real estate license for the purpose of becoming a realtor.
This is an exciting and rewarding career path for individuals who want to earn a great living while they learn about the industry. Just be sure you understand the risks of becoming a real estate agent before jumping in.
If you decide to become a real estate agent and want to increase your visibility to clients, claim your free agent profile at Mashvisor.
However, if you already have a career you love, you most likely only want access to the benefits for investing in real estate. In this case, it probably is not worth the time and monetary investment, especially when you have incredible real estate investment tools at your disposal through Mashvisor.
Related: How to Make Money in Real Estate With No License
In short, you do not need a real estate license to become a successful real estate investor. Whether you choose to get your real estate license or not, consider taking advantage of Mashvisor’s real estate analysis tools to help you make the most of your investing.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Related: Challenges of Becoming a Real Estate Investor: Mashvisor’s Solutions
