Should I get my real estate license? It’s a simple question, but one that has nonetheless perplexed investors for quite some time.
I, however, maintain that taking on the role of an actively licensed real estate professional awards savvy investors an entirely new array of benefits to tap into that were previously unavailable. If for nothing else, a real estate license is essentially a tool to make the prospect of investing in real estate a little easier. The benefits a real estate license awards investors are significant, and it’s time you found out for yourself what they are.
A great deal of investors, at least that I am aware of, have found themselves debating the semantics of a rather simple question: Should I get my real estate license to invest? And while simple on the surface, the answer to this question isn’t as straightforward as many would have hoped.
In a vacuum, getting your real estate license is a great idea. At the very least, adding another tool to your arsenal can’t hurt. In fact, I am convinced that the benefits to receiving your real estate license greatly outweigh any reason not to, but I digress. There is an argument to be made that some investors will be better off working with licensed brokers and agents instead of becoming one themselves. And therein lies the true debate: Are you going to be better off hiring a professional real estate agent, or dedicating the time and money to becoming one yourself?
In order to make your decision easier, I have outlined some of today’s most popular reasons real estate investors choose to get their real estate license below.
For one reason or another, real estate investors have debated whether or not to get their real estate licenses for quite some time. And while an argument can be made for either side of the spectrum you prefer, I am convinced that no bad can come from equipping yourself with another tool. Because that is what a real estate license is: a tool to facilitate your development as a real estate investor.
At the very least, there are four universally accepted benefits to receiving your very own real estate license:
1. Access To The MLS
The multiple listing service, otherwise known as the MLS, is the country’s most comprehensive real estate database endorsed by the National Association of Realtors (NAR). And, as such, the MLS has proven to be nothing less than an invaluable, reputable tool for anyone with access to it. It is worth noting, however, that the MLS isn’t a single database, but rather an amalgamation of approximately 700 different regional databases spanning the whole of the United States. And, therein lies the true value of the MLS: it’s the most exhaustive collection of housing databases sanctioned by those with boots on the ground.
Those that have access to the MLS have an inherent advantage over those that don’t, which begs the question: How, exactly, does the MLS benefit those who can harness its power?
Those with access to the MLS can conceivably enhance their speed of implementation, target specific listings, check comparables, and carry out a slew of other data-centric tasks — all from the comforts of their home office. Perhaps even more importantly, however, is the access licensed brokers and agents are granted to the comments of their industry counterparts. You see, each listing on the MLS comes complete with respective insights noted by the professionals most closely associated with the property. If for nothing else, you gain insight on a property that those without the MLS aren’t aware of. Provided the notes are comprehensive and reliable, there is no reason to think the information you glean from them wouldn’t give you at least a slight advantage when it comes time to negotiate a deal.
2. Additional Streams Of Income
One of the most popular reasons investors choose to obtain their real estate license is also the most obvious: they award their recipient more opportunities to make money. And what is real estate if not for a vehicle to realize monetary gains?
It shouldn’t surprise anyone to learn that actively licensed real estate professionals are entitled to a commission on each transaction they are responsible for. It’s worth noting, however, that said commission is nothing to scoff at. While commissions certainly vary between markets and experience, some commission fees can earn licensed agents and brokers upwards of six percent. On a $500,000 home, licensed investors can make upwards of $30,000 acting as the agent. The commission one earns can be paid out at closing to fund certain expenses, or put back into a respective property to build equity.
Perhaps even more importantly, the acquisition of a real estate license awards investors options. With the ability to make commissions on facilitating a transaction, investors are no longer reliant on actually investing in properties. With a real estate license, it’s entirely possible to generate additional income without actually investing in a subject property.
3. Networking Opportunities
I am convinced that the greatest benefits of acquiring your real estate license as an investor aren’t in the tangibles, but rather in the intangibles. While generating commissions and browsing the MLS have their inherent advantages, they pale in comparison to the prospect of networking with an inherent degree of leverage. Real estate is a people business; it always has been and always will be.
Any advantage you can gain in developing a working rapport with buyers, sellers and industry counterparts is invaluable. And, in my experience, nothing builds a working rapport more so than trust — the same trust a licensed agent tend to demand. At the very least, a real estate license suggests an inherent degree of reputability. Think about it. Would you rather work with a professional that has had to prove their place in the industry, or a proverbial nobody? Given the two options, most would choose the former.
In the event you decide to get your real estate license, it stands to reason your prospects for networking will increase dramatically. Not only should you find yourself with more credibility in your corner, but it becomes a lot easier to acquaint yourself with other like-minded, reputable agents in your industry. Remember, who you know is just as important as what you know. Building a comprehensive network of professionals is one of the single, most important things you can do as an investor, and getting a real estate license can greatly improve your odds of doing so.
4. Access To Tools & Resources
Last, but certainly not least, getting a real estate license can increase your access to tools and resources. Namely, there is a good chance your local Board of Realtors can provide you with invaluable tools, discounts, and educational courses to use to your advantage. And while many of the resources they have made available to your predecessors probably won’t be directly correlated to real estate investing, they can indirectly alter your perception of the real estate landscape for the better. Knowledge is power. The more information you are made privy to, the better. I maintain that anything you can do to increase your real estate education, the better — no matter what you are taking in. Perhaps even more importantly, having access to said tools and resources can keep you up to date and in touch with local market trends.
If you have found yourself struggling with the idea of getting your real estate license more than once, you are not alone. There isn’t a simple answer. Many investors would argue their time is better spent elsewhere, and that it’s better to work with a licensed agent than to become one themselves. And they wouldn’t be wrong. It’s worth noting, however, that getting your real estate license to further your investing career coincides with several benefits, not the least of which I outlined above. So before you decide whether or not to get your real estate license to invest, consider your business as a whole, and then proceed to determine which is the best fit for your company.