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Pros and Cons of Getting A Real Estate License As An Investor

Real Estate Agent Sitting At Desk With Face MaskYou may have wondered if you should get your real estate license given that you are a McDonough single-family rental property owner or an experienced investor. To be a successful investor means you are able to reduce your costs in the long-term. You could also be considering the value of insider information, especially in competitive markets. Counting on a real estate license to save you money and give you the access you desire is a risky thought that needs to be thought through well. You should first consider both the pros and cons of getting a real estate license as an investor.

Saving money on commissions is the most common reason why investors want a real estate license. Not everyone is happy with paying someone else a huge percentage fee. And, if you plan on selling many properties– like if you are in the house flipping business– then you might be able to save yourself some money.

However, those savings are an illusion for McDonough rental property investors who plan to buy and hold properties. The reality is that it is the seller who pays the real estate agent fees, not the buyer. Real estate agents are also required to work under a broker and these brokers charge either a flat fee or a percentage of your commission for every transaction. These fees will further reduce any perceived savings.

Aside from the idea of saving money, the idea of having access to the Multiple Listing Service (MLS) makes getting a real estate license attractive to investors. This service is actually a very valuable resource for properties on the market. The free version of the MLS is also available but it does not have the comprehensive data that makes this listing service valuable to investors.

However, if gaining access to the MLS is your topmost reason for getting a real estate license, you should think twice. Licensees are subject to laws regarding their rental property that they were not subject to as private investors. Access to the MLS is not free, even to real estate agents. There are fees you have to pay, including those for the required licensing course, the licensing test, and the license itself. Other costs include fingerprinting, brokerage fees, Association of Realtors dues, state fees, and so on. After all that, you still have to pay for the MLS access. With all of this, your real estate license could actually end up costing you thousands of dollars. You could recover the cost in the long run, but a lot of these costs are ongoing so they have to be factored into your plans.

At the end of the day, you really should ask yourself how much your time is worth. Can you afford to spend upwards of 100 hours taking a pre-licensing course and studying for the licensing exam? In many states, even the minimum number of hours required to certify can take months to complete. If you’re already busy with your investing business, getting a real estate license can be a big challenge. To add to that, each hour you spend on licensing is an hour away from growing your investment portfolio. If you see real benefits in getting your real estate license, it still might be worth the investment in the short term. So you have to crunch the numbers very carefully and consider your other plans before you decide on something that might not give you the results you want.

Would you like to learn more about how to grow your McDonough investment portfolio without a real estate license? Contact us online or give us a call at 770-506-1237.

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