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

Real Estate Agent Sitting At Desk With Face MaskAs either a first-time Belgrade single-family rental property owner or an experienced investor, you might have considered getting your real estate license. As an investor, long-term success means you are able to manage costs in all possible areas. 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. Getting a real estate license as an investor has both advantages and disadvantages that you must consider before you make that decision.

Investors usually want to get a real estate license to save on commissions. Usually, we don’t feel so happy about the thought of paying someone a big percentage fee. And, if you plan to sell a lot of properties — like flipping houses — you could save some money.

However, those savings are an illusion for Belgrade 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. Real estate agents must also work under a broker who would charge a flat fee or percentage of your commission with each 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. The MLS is an important 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. As a licensee, you might be subject to new rental property laws that you were not subject to when you were a private investor. Even as a real estate agent, you don’t get free access to the MLS. Aside from paying for the required licensing course, you also have to pay to take the licensing test, and finally the fee for the actual license itself Other costs include fingerprinting, brokerage fees, Association of Realtors dues, state fees, and so on. You also have to pay for the MLS. With all of these, your real estate license could cost you thousands of dollars. You could recover some of the costs over time, but many of these costs are ongoing and should be included in your plans.

Before you fully commit to getting a license, make sure you have asked 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. Having an investing business already keeps you busy, and getting a real estate license can become very challenging. Every hour you spend on licensing is an hour you take 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. It is, therefore, very important that you calculate all the costs involved and figure out how this will all fit into your plans so you do not jump into something that might not work out well for you.

Would you like to learn more about how to grow your Belgrade investment portfolio without a real estate license? Contact us online or give us a call at 406-586-2226.

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