There are many benefits of getting a real estate license, but you should also consider a few disadvantages before deciding that doing so is right for you.
Another benefit of being a real estate agent is the opportunity to earn up to $9,000 commission if you can sell the property without involving another agent. If you sell the house for $300,000 as the listing agent, you receive a $4,500 commission after splitting with your offices and broker. In a fifty-fifty commission split with your office, you receive a $3,000 commission in the same scenario. If you purchase a property for $200,000, and the total commission is 6%, the selling agent’s office and your office receive $6,000. After you pay your broker split and taxes, you are still making money that you would pay out to someone else. If you flip these properties and quickly list them yourself, there is another 2.5% on the sales side. Since you would buy these properties anyway, extra income could be put back into your business. If you close just six investment deals a year and act as the Realtor, you are saving and making over $10,000. In addition to making money on the deals, one of the benefits of being a real estate agent is saving commissions on your own personal deals. Meeting the right real estate agent or being in the right office can completely change your investing business. The more people you can meet, the greater the chance that you will close more deals. No matter how you slice it, having the opportunity to dramatically increase your network is one of the major benefits of a real estate license. Other agents can also introduce you to reliable real estate professionals such as surveyors, appraisers, and lenders. Brokers can warn you about certain legal issues you may face and educate you on contracts. In doing so, you can learn through their experience and get tips on saving time on certain tasks. You are also open to working with other brokers and agents within your office. One of the benefits of being a real estate agent is the opportunity to develop contacts internally at banks that could give you the inside track for bank-owned properties.
This number is small compared to the number of new contacts that being a Realtor can help you make – not only in your own office but at open houses and local networking functions. Some are skeptical about working with an investor who also wears a Realtor hat. Being a real estate investor and Realtor can be a delicate balance.