As either a first-time Davie single-family rental property owner or an experienced investor, you may have wondered if you should get your real estate license. As an investor, long-term success means you are able to manage costs in all possible areas. Insider information is also very important, 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. There are both pros and cons to getting a real estate license and, as an investor, it is best that you consider this.
Saving money on commissions is the most common reason why investors want a real estate license. The thought of paying someone else a big percentage fee does not sit well with everyone. Also, if you plan to sell many properties –like if you are flipping houses– you may save yourself some money.
However, those savings are an illusion for Davie rental property investors who plan to buy and hold properties. It’s because the seller is actually the one who pays real estate agent fees, and not the buyer. You must also realize that it is a must for real estate agents to work under a broker, all of whom will charge a flat fee or a percentage of your commission for every transaction. These fees will further reduce any perceived savings.
Along with the idea of saving money, most investors also want to gain access to the Multiple Listing Service (MLS) by having a real estate license. This service is actually a very valuable resource for properties on the market. The free version of the listing service lacks comprehensive data that makes the MLS very important for investors.
Getting access to the MLS as your main reason for wanting a real estate license is something you should reconsider. As a licensee, your rental property might be subject to new laws that you didn’t have to think about as a private investor. Also, MLS access is still not free even to real estate agents. You will have to pay for the required licensing course, pay and take the licensing test, and pay for 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. Another thing is that many of these costs are ongoing and must be considered in 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. Crunch the numbers carefully and lay down your plans before jumping into something that may not give you your desired outcome.
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