Is A Real Estate License Worth It?

Question

Hi, I am new to real estate investing but have been doing a lot of research over the last year or so (reading books, seminars, videos, etc.). I'd like to get into buying rentals either in or out of state. My question is: Is getting a real estate license worth it? I probably have the extra time to pursue it but is it necessary? So many of the stories I hear are from people who aren't licensed in real estate but I imagine there must be some advantage to it. Any advice or experience would be greatly appreciated. Thanks

Jeff Roth · Answer

Hi Patrick-

Congratulations on being new to real estate investing.

You asked if it is worth it to have your real estate license as an investor.

While not necessary, I do think there are several advantages to having your license as an investor.

1. Ability to help others invest and make money doing that.

2. Ability to use the tools available to you to as a Realtor to find comparable value and market rents.

3. Being notified about deals coming to the market.

4. Making a commission on the properties you purchase.

5. Staying compliant for your license with continuing education keeps you updated on laws affecting real estate and fair housing.

So, I believe there is an advantage to having your license as an investor but it is not necessary.

To Your Success!

Ashish Acharya · Answer

@Patrick McMahon Getting a real estate license can be helpful depending on how active you want to be in your investing, but it's definitely not required, and in some cases, not necessary at all.

• Worth it if you plan to be hands-on: sourcing your own deals, negotiating offers, wholesaling, or flipping. You can earn commissions, access the MLS, and gain industry credibility.
• Less useful if you’re a buy-and-hold or out-of-state investor who plans to rely on agents, lenders, and property managers. The ongoing education, fees, and compliance requirements may outweigh the benefits.
• From a tax perspective, holding a license does not increase your ability to claim Real Estate Professional Status (REPS). The license alone isn’t enough, you still need to materially participate in rental operations and meet the 750-hour and >50% rules.
• However, if you use your license actively (e.g., as an agent earning commissions), you can deduct related business expenses like licensing, education, MLS dues, and mileage on your Schedule C.

If you want to be actively involved in real estate beyond just owning rentals, especially on the agent side, a license can be a good investment. But it won’t help you with REPS eligibility or taxes on rentals unless paired with active participation. For many investors, staying unlicensed and focusing on smart acquisitions with a CPA and agent on your team is the better path.This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.

David Peschio · Answer

Becoming a licensed real estate agent offers several advantages. One significant benefit is gaining direct access to MLS data, enabling you to identify potential deals more quickly than the general public. Furthermore, you can realize considerable savings on commissions when buying or selling your own properties, as you'll eliminate the need for an agent. For those interested in assisting others with their real estate transactions, licensure can also open up an additional avenue for income. Beyond the financial benefits, holding a real estate license can enhance your professional credibility and expand your industry network, providing you with valuable connections and insights.However, it's important to consider the potential drawbacks. The initial licensing process involves upfront expenses for required courses, examinations, and membership dues, along with ongoing obligations such as continuing education. Licensed agents also face specific disclosure requirements when purchasing properties for their own account, which can introduce added complexity to these transactions. If your primary business focus is on owning and managing rental properties rather than acting as a broker, obtaining a real estate license might not represent the most efficient use of your time and resources.  The decision of whether or not to pursue a real estate license hinges on your long-term objectives. If direct access to property listings and the opportunity to earn commissions are priorities for you, the investment in licensure may be worthwhile. Conversely, if you prefer to concentrate on property acquisition and management while building relationships with experienced real estate agents, operating without a license can be a perfectly suitable approach.

Ezekiel Trevino · Answer

There are some pros and cons to getting your real estate license. The cons: as a real estate agent, you would have to work under a broker. You could work with big names such as Keller Williams, or Remax, etc... Or work with a small reatly group. Your listings will the borker's listings. If you decide to move to another brokerage, listings that you listed with your old boker will stay with broker. When it comes to your comissions, your boker will get a percent of that. As far as how much of it you would have to discuss that with the broker. If you decide to wholesale, you would need to talk to your broker and see if it is allowed.

The Pros: If you join an MLS group, you have access to listings from other Realtors before they are listed on Zillow and other listings websites, networking opportunities, education opportunities, contracts and forms, and extra comisson for helping other people purchase or sell properties.

Evan Polaski · Answer

@Patrick McMahon, investor who had license for about 9 months, and then let it lapse.

Clearly, I did not find the value in it.  The course work is easy but really doesn't teach you anything practical about investing, or even really about buying and selling real estate for clients.

Like Denise noted, there are on-going fees to maintain your license, continuing education, brokerage fees, etc.  All in all it costs money every month to keep it.  And, if you goal is purely to invest your own capital and manage your own properties, you won't need it.  The best it did for me was to allow me to access listed properties without having to wait for an agent to respond, which was sort of nice.  But in reality, getting a showing the next morning or later that same day with an agent never caused me to get a deal I would have otherwise lost.

Austin McClain · Answer

It's not needed to start, but can be useful as you scale

Denise Supplee · Answer

Hello @Patrick McMahon, I have been licensed since 1985. I have been investing in real estate since the end of the 90's. If you are looking to earn money by selling, listing or managing real estate, I would say go for it. Otherwise, I would say don't do it, there is much more to it. For instance, I have to pay annual dues to NAR, my local assoc and the MLS as well as insurance.  Additionally, you must keep credits up which varies by state. Another cost and more time. And to be honest, I could have invested without having my license.  I wish you the best of success either way you go.

Patrick McMahon · Answer

@Jill F. That makes sense, thank you.

Patrick McMahon · Answer

@Evan Polaski Okay thanks for sharing as well. I think I will see how I do without it for the time being based off the replies. Appreciate it.

Is A Real Estate License Worth It?

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