I am a buy and hold single family real estate investor. I am interested in obtaining my real estate license, and I was wondering if there were any disadvantages to doing so.
I plan to purchase 3 homes over the next year or two in addition to selling 2 homes.
I'm not interested in becoming a full time real estate agent. My primary interest is increasing my knowledge base and saving on commissions.
I appreciate your thoughts, time, and helpful input.
In my area it costs around $1000 to $1500 per year to maintain your license and probably close to $2000 the first year, including the cost to obtain your license. You have to make sure the advantages outweigh the expense.
In addition to the advantages you noted, there are also several other advantages such as easier to do accurate market analysis, property searches, learn the market and your area, higher respect in the investor world, etc.
You will want to make sure you hang your license with an investor friendly brokerage also. Some brokerages may not let you save as much commission as you would like.
Good luck out there!
If you are just using it to save on commissions I would say it is not worth it. Though I have never priced it out exactly...I bet that my required costs of being an agent are close to $5,000 a year. License fees, MLS dues, NAR and Local Realtor Board dues, Sentrilock fees, Continuing Education fees, costs for signs, Errors and Omissions insurance, fees from your brokerage. All these things add up. My entire overhead including the additional non required fees like marketing is probably around $20,000 per year, maybe more.
Also keep in mind too that most Errors & Omissions insurance policies do not cover you if you are a principal to a transaction.
Now if you actually do want to add it into your business plan and do other transactions besides your own, then I do think it is worth it. You can also learn quite a bit from being an agent.
Thank you MIke and Russell,
I had no knowledge of the start up and annual cost to maintain a real estate license beyond the test/course fees.
Thanks for helping me make a more fully informed decision.
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