Are there downsides of getting a real estate license?

Question

I am curious if there are any downsides or disadvantages to getting a real estate license as an investor?  I heard that when you are licensed agent you are required to hold security deposits in the brokers trust account, but I can't seem to find anything online that supports or refutes that (this would be a MN license).

I also understand that you are required to disclose to tenants that you are a licensed agent, but that doesn't seem like a big deal.

Are there any other things people would consider a downside that I should be considering?

James Masotti · Answer

@Mike Pederson - Lots of discussion on this topic can be found on this FAQ thread

John Woodrich · Answer

The coursework and cost and time to maintain the license are the main pitfalls.  I am not a realtor but it would not cost anywhere near $5k-$10k to maintain a license unless you are paying for office space.  It has been a while since I have looked into it but I recalls ~$500 board fees, likely $100 license renewal, then CPE.  Maybe a local realtor can help you out.

Bryan O. · Answer

I don't know MN, but in CO you must be an agent to manage other people's property. You can still manage your own and do not need the trust accounts. As an agent you may also be required to use the state approved real estate forms.

If you are an investor then I do not see a downside. If you are a wholesaler then you may not be allowed to use your own buy/sell contracts and you have greater risk as you may be held to a higher standard.

If you are a flipper then it could save quite a bit of money if you like the additional work.

If you clarify what you are trying to do in RE you may get more targeted responses.