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

Real Estate Agent Sitting At Desk With Face MaskIrrespective of whether you’ve just bought out your first Ammon single-family rental property or are an experienced investor, you may be interested to know if you should actually get your real estate license. As an investor, your long-term success leans on reducing costs how often and wherever you can. You’re probably weighing the value of insider information, particularly in competitive markets. That may be so, but if you’re putting faith in a real estate license to save you money and give you the access you want, you may need to think hard and carefully first. There are both pros and cons to possessing a real estate license as an investor, all of which should be given serious consideration before you ever decide whether it’s great for you.

One of the biggest motivations why investors want to get a real estate license is to save on commissions. Generally, just the thought of paying someone else a hefty percentage fee can be really unpleasant. And, if you plan to sell a lot of properties (when flipping houses, by way of illustration), you may be able to spare yourself some money.

But even if that is so, those savings may only be an illusion for Ammon rental property investors who want to acquire and hold properties. The reason is that it is usually the seller who pays real estate agent fees, not the buyer. It’s similarly imperative to realize that real estate agents are obligated to work under a broker, all of whom will need either a flat fee or a percentage of your commission with each and every transaction. These fees will further deduct from any perceived savings.

Aside from saving money, lots of investors are looking towards getting a real estate license to acquire a way to get into the Multiple Listing Service (MLS). This service is definitely highly coveted taking into account that it is such a valuable resource for properties on the market. There is a free version of the listing service, of course, but it lacks the comprehensive data that makes the MLS so essential for investors.

If gaining access to the MLS is your key reason for wanting to get a real estate license, anyway, you might have to stop a while to really consider it. As a licensee, you may be subject to new laws about your rental property that you are not subject to as a private investor. Even as a real estate agent, access to the MLS is not free. You will be required to pay for the required licensing course, pay to take the licensing test, and pay a fee to get the license itself. Some other expenditures include fingerprinting, brokerage fees, Association of Realtors dues, state fees, and everything else. And then besides that, you have to indeed pay for MLS access, likewise. In short, having your real estate license could cost you thousands of dollars. You may be able to get that cost back soon after but many of these outlays are ongoing and must be factored into your plans.

Lastly, it’s critical to ask 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 quite a lot of states, even the minimum number of hours required to certify can take months to complete. If you are currently busy with your investing business or have various demands on your time, trying to attain a real estate license can be a big issue and challenge. More importantly, every hour you are spending on licensing is an hour not growing your investment portfolio. But if you actually see the real benefits of obtaining your real estate license, it definitely just might be worth the investment in the short term. But bear in mind, it’s imperative to crunch the numbers carefully and be completely honest about your intentions before decidedly jumping into anything that might not give you the desired return.

 

Would you like to learn more about how to grow your Ammon investment portfolio without a real estate license? Contact us online or give us a call at 208-522-2400.

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