To become a Real Estate Agent or NOT? That is the question
Alice GoodsonPro Member
Rental Property Investor · Huntsville Alabama · Member since 2024 · 32 posts · 12 votesBP Community,
I am finding myself torn about whether or not to take the real estate exam and become a agent. I currently have 18 doors and once I become a agent in Alabama, all funds received from my rentals will have to flow through my broker for oversight. I will also be subject to all of the rules of disclosure that I am a real estate agent. The upside I was looking for is integration into the networking with the various agents, areas, GMs, construction teams, as well as gaining a better understanding of the environment -- Huntsville, Decature, Madison, Montgomery Alabama areas. Can someone help me with the pros and cons of becoming a agent as a landlord with a growing portfolio?
Txs
Alice G-
It sounds like you are already a successful investor and you've achieved a scale that most will never achieve. You can network with agents, GMs, construction teams and understand markets without becoming an agent. What upside does being an agent really offer?
You mentioned some of the downsides. I'd add the time commitment and costs to that list.
Also, you may be focused on SFRs today, but what if you pivot to apartments, retail, industrial, or some other form of real estate. While I never downplay the benefit of general education, the tangible benefits would be negligible.
It sounds like you are already a successful investor and you've achieved a scale that most will never achieve. You can network with agents, GMs, construction teams and understand markets without becoming an agent. What upside does being an agent really offer?
You mentioned some of the downsides. I'd add the time commitment and costs to that list.
Also, you may be focused on SFRs today, but what if you pivot to apartments, retail, industrial, or some other form of real estate. While I never downplay the benefit of general education, the tangible benefits would be negligible.
It sounds like you are already a successful investor and you've achieved a scale that most will never achieve. You can network with agents, GMs, construction teams and understand markets without becoming an agent. What upside does being an agent really offer?
You mentioned some of the downsides. I'd add the time commitment and costs to that list.
Also, you may be focused on SFRs today, but what if you pivot to apartments, retail, industrial, or some other form of real estate. While I never downplay the benefit of general education, the tangible benefits would be negligible.
@Greg Scott Appreciate the feedback. This is why I decided to jump into BP and get my community thoughts. Access is my primary goal to include the MLS but if it will increase the complexity of my purchasing properties as an investor I feel very hesitant. The side gig of selling a property or two is also a upside.
Thank you for your speedy feedback.
Alice G-
For the past 6 years I've been an investor and an agent and I would say if MLS access is the only reason you wanted it and not extra income to work with clients or to pay yourself a commission when acquiring a property then I don't think the admin headache is worth it. I think you could focus instead on building relationships with experienced investor agents that can guide you and also look to make connections with wholesalers for off market properties which often have better numbers.
For the past 6 years I've been an investor and an agent and I would say if MLS access is the only reason you wanted it and not extra income to work with clients or to pay yourself a commission when acquiring a property then I don't think the admin headache is worth it. I think you could focus instead on building relationships with experienced investor agents that can guide you and also look to make connections with wholesalers for off market properties which often have better numbers.
@Maria Valverde Thank you for taking the time to respond. These comments truly help inform my decision making. Pretty much I plan to just keep investing and leverage the knowledge I gained from the course. I already have a W2 that pays very well and keeps me busy. I shouldn't add the stress of being a Agent.
Alice G
BP Community,
I am finding myself torn about whether or not to take the real estate exam and become a agent. I currently have 18 doors and once I become a agent in Alabama, all funds received from my rentals will have to flow through my broker for oversight. I will also be subject to all of the rules of disclosure that I am a real estate agent. The upside I was looking for is integration into the networking with the various agents, areas, GMs, construction teams, as well as gaining a better understanding of the environment -- Huntsville, Decature, Madison, Montgomery Alabama areas. Can someone help me with the pros and cons of becoming a agent as a landlord with a growing portfolio?
Txs
Alice G-
If you pick the right company to work with, and they either have a separate PM department, or solely pursue PM and they have solid systems it can be a great opportunity to learn. If they allow you to also get listings and rep buyers, the commissions can boost your investable funds while you handle daily life with a decent salary for the PM work. What you do NOT want to do, is work for a completely sales oriented company, or a PM department that is secondary and poorly organized.
MLS access is nice, but every other agent also has access, so you need to be able to move and make decisions very quickly...which you probably will not be able to do until you get a lot of hours behind you. It is good for learning areas and getting access to vacant units to walk through. Also, if they have dedicated PM, you will hopefully have access to excellent screening resources, and hopefully someone else on the team to walk you through the details on a lot of them to get an idea of what involved to do it right. Of course, if they have not been doing it right, you will also learn about the painful side of PM, evictions, trashed move outs, excuses, etc. maybe even some Court time. Learning about rental preps and actual repair projects are always educational as well.
If you pick the right company to work with, and they either have a separate PM department, or solely pursue PM and they have solid systems it can be a great opportunity to learn. If they allow you to also get listings and rep buyers, the commissions can boost your investable funds while you handle daily life with a decent salary for the PM work. What you do NOT want to do, is work for a completely sales oriented company, or a PM department that is secondary and poorly organized.
MLS access is nice, but every other agent also has access, so you need to be able to move and make decisions very quickly...which you probably will not be able to do until you get a lot of hours behind you. It is good for learning areas and getting access to vacant units to walk through. Also, if they have dedicated PM, you will hopefully have access to excellent screening resources, and hopefully someone else on the team to walk you through the details on a lot of them to get an idea of what involved to do it right. Of course, if they have not been doing it right, you will also learn about the painful side of PM, evictions, trashed move outs, excuses, etc. maybe even some Court time. Learning about rental preps and actual repair projects are always educational as well.
Hello @Richard F. Thanks for great feedback. I hear you and I understand. You covered all the angles and left me more aware than I was about tge different brokerage offerings. Think I will keep my momentum and not get licensed. No reason to mess up what is working for me. Thanks again
Alice G -
You are me 6 years ago. Got my license for my own deals, became an accidental agent and now do it full time. I wouldn't get your license just MLS access, if your primary goal is investing, but if you're open to really learning the trade and becoming a full time agent, your investing background gives you an advantage over the typical agent starting off and you could probably make a lot more money than you have been investing. Having consistent income from the rentals will give you an advantage as well because RE sales are inconsistent, you'll be better situated to ride out the troughs, when other agents will drop out. Just some food for thought.
You are me 6 years ago. Got my license for my own deals, became an accidental agent and now do it full time. I wouldn't get your license just MLS access, if your primary goal is investing, but if you're open to really learning the trade and becoming a full time agent, your investing background gives you an advantage over the typical agent starting off and you could probably make a lot more money than you have been investing. Having consistent income from the rentals will give you an advantage as well because RE sales are inconsistent, you'll be better situated to ride out the troughs, when other agents will drop out. Just some food for thought.
Ha! Same story: accidental agent.
I quit my corporate job 2015 to finally enjoy the dream of no job and passive income. After 2 weeks of watching daytime TV, because everyone else is at work, I decided to get licensed. Found out that unless you do lots of deals, you really don't know anything - so, that became the next goal..
The next 2 years were by far my weakest as an investor.
Huh? Why would you want to go through the licensing process, pay all the fees, place your license as required by law as a real estate agent with a broker and then pay a monthly fee and a commission cut for that privilege? Oh, you'll have continuing education expense, annual trade fees, and some monthly or so agent meetings to attend too. And, I'm not sure the reasoning on managing trades, etc. That doesn't come with a real estate license. You're successful now as an investor. If you want something new to do, then go for it but know that it's not what you think it is based on your post. There's a ton of opportunities in real estate but this may not be the fit you had hoped it could be. Congrats on building your empire...impressive!
I would encourage you to get licensed, because the benefits are greater than your supposed downside: Your concern about “broker oversight” comes up a lot—but in your case, it’s probably simpler than it looks, ref:
Alabama Real Estate Commission (AREC) Rule 790-X-1-.03 and Alabama Code § 34-27-2(b)(1) clarify that your personal rental income does not have to flow through your broker, provided you follow certain behavioral boundaries.
1. You’re Acting as the Owner
If you own those 18 units—either personally or through an LLC—you're acting as an owner, not as an agent.
That matters. When you’re managing your own property, you generally don’t have to run rents or security deposits through your broker’s trust account.
You’re just running your own business.
2. When the Broker Gets Involved
The broker only comes into play if you start mixing roles.
That would be things like:
If you keep it clearly as owner activity, you usually stay outside of that.
[If my interpretation of Rule 790-X-1-.03 and Alabama Code § 34-27-2(b)(1)
the rules are incorrect, I'm sure I'll hear about it from our community--always check with your real estate commission.]
3. You Still Need to Disclose
Even though the money stays separate, your license doesn’t disappear.
So you’ll still want to:
Most brokers will have a simple disclosure form for this.
4. The Real Issue — Your Broker’s Policy
This is the part most people miss. The state may allow it…
but your broker can still set their own rules.
Some are flexible. Some want everything under their umbrella.
Bottom line:
You’re probably not as boxed in as it feels. But before you move forward, have a direct conversation with your broker and ask how they handle owner-managed properties. That’s where the real answer is.
@Alice Goodson You are thinking about it the right way as there are definitely trade-offs. The networking, market insight and deal flow can be a big advantage but the added oversight and disclosure requirements are real. That said, the real advantage to getting your license is the option to eventually open your own brokerage which would give you full control and additional income streams beyond just your rentals.
Find a different broker.
Getting licensed should never be a hinderence. Just sounds like you're considering the wrong brokerage. Find an investor friendly broker.
The only involvement your broker could have is if you use your license to list a property for rent, or if you're looking to represent a client in a capacity that relates to tenants/property management/listings.
Most likely, you're using Zillow for listings and it doesn't involve licensed behavior.
Overall, your portfolio should remain personal unless you begin involving the broker.
Also being licensed, would be complimentary to your journey. Do it.
Hey @Alice Goodson,
I think it is going to really depend on your goals. There is a lot of fee when you become a real estate agent - are you doing it jut because of your deals? or do you want to help others get into real estate investing? I am a real estate agent + investor and I want to transition to becoming a full-time real estate investor but meanwhile I am juggling clients, and it is a lot of work, espcially if you already have a W2 - if you just want it for your own deals, it might not make sense, especially if you're just buying to BRRR..
BP Community,
I am finding myself torn about whether or not to take the real estate exam and become a agent. I currently have 18 doors and once I become a agent in Alabama, all funds received from my rentals will have to flow through my broker for oversight. I will also be subject to all of the rules of disclosure that I am a real estate agent. The upside I was looking for is integration into the networking with the various agents, areas, GMs, construction teams, as well as gaining a better understanding of the environment -- Huntsville, Decature, Madison, Montgomery Alabama areas. Can someone help me with the pros and cons of becoming a agent as a landlord with a growing portfolio?
Txs
Alice G-
You sure YOUR rental income needs to flow through your Broker if you become an Agent? In most states it would be your Agent activities, property management for others, rent collection for others, sales for others, etc...that would flow through the Broker. Your own rentals would not.
BP Community,
I am finding myself torn about whether or not to take the real estate exam and become a agent. I currently have 18 doors and once I become a agent in Alabama, all funds received from my rentals will have to flow through my broker for oversight. I will also be subject to all of the rules of disclosure that I am a real estate agent. The upside I was looking for is integration into the networking with the various agents, areas, GMs, construction teams, as well as gaining a better understanding of the environment -- Huntsville, Decature, Madison, Montgomery Alabama areas. Can someone help me with the pros and cons of becoming a agent as a landlord with a growing portfolio?
Txs
Alice G-
You sure YOUR rental income needs to flow through your Broker if you become an Agent? In most states it would be your Agent activities, property management for others, rent collection for others, sales for others, etc...that would flow through the Broker. Your own rentals would not.
Hello BP Team,
My besties. Sorry I have been out of pocket but I appreciate the feedback so much. Think I am going to dust off .. study and get this thing going. I truly appreciate this community for serving as my sounding board.
Alice G -
Heritage Rentals LLC
It looks like @Alice Goodson is in a really good spot here, definitely well on her way.
The advice seems to be a mixed bag, for obvious reasons.
If she didn't have her rental properties and was just starting off, would the advice be any different? Using a license as a first step into investing?
It looks like @Alice Goodson is in a really good spot here, definitely well on her way.
The advice seems to be a mixed bag, for obvious reasons.
If she didn't have her rental properties and was just starting off, would the advice be any different? Using a license as a first step into investing?
It looks like @Alice Goodson is in a really good spot here, definitely well on her way.
The advice seems to be a mixed bag, for obvious reasons.
If she didn't have her rental properties and was just starting off, would the advice be any different? Using a license as a first step into investing?
Ken, that is good feedback, and makes a lot of sense. I appreciate it.
Congrats on the 18 doors! Being an investor will give you good edge as can relate more to your investor clients, it has helped me a lot!
Hello Alice;
I asked the same question 9 years ago. I however pulled the trigger and got the license.
I found a broker that does not charge me a monthly fee, and is comfortable with my rental activities on my properties. The expenses I mainly see are NAR, MLS etc.
The upside is with my dozen or so rentals is that I have an instant "farm" for referrals. That farm with their friends and relatives has made me a lot of money in real estate. I have made masters club twice now (top 10% of realtors in the county). I average 30 to 50K a year in commissions, without any advertising (all referrals).
When I do have a vacancy, many "flaky" possible renters don't even apply, as I disclose up front I am a realtor. I see very few "oh poor me" stories, they want an easy mark. Nervous tenants know I am an agent so they are relieved that they are dealing with a legitimate landlord.
As a realtor I have negotiated with my broker for a flat rate commission. I then reduce the offer price for my personal acquisitions by the difference of what is offered and what the sellers offer in compensation. I pay less for the property, which reduces property taxes for the rest of time....
So to answer you, for me there is no question. DO IT. I a few years you will look back and smile.