Regardless of whether you’ve just purchased your first Brookline single-family rental property or you are an experienced investor, you may have asked if you should get your real estate license. As an investor, your long-term success counts on reducing costs any way you can. You’re likewise pondering on the value of insider information, particularly in competitive markets. Though if you’re placing your confidence in a real estate license to save you money and give you the access you want, you may have to think again. There are both pros and cons to obtaining a real estate license as an investor, all of which should be taken into consideration prior to making a decision whether it’s right and proper for you.
Classified among the biggest explanations for why investors want to get a real estate license is to save on commissions. Usually, the idea of paying someone else a hefty percentage fee can be unpleasant. And, if you plan to sell a lot of properties (when flipping houses, for instance), you may be able to save some money.
But, in truth, those savings are really just an illusion for Brookline rental property investors who intend to obtain and hold properties. The reason for this is that it is usually the seller who pays real estate agent fees, not the buyer. It’s moreover essential to realize that real estate agents are absolutely required 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 decrease any potential savings.
Besides saving money, countless investors favor the idea of obtaining a real estate license to secure entry to the Multiple Listing Service (MLS). This particular service is highly coveted for the reason that it is such a valuable resource for properties on the market. There is a free version of the listing service, but sadly, it lacks the comprehensive data that makes the MLS so significant for investors.
If getting access to the MLS is your primary reason for desiring a real estate license, though, you might like to think hard about it first. As a licensee, you may be subject to new laws related to 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 have to pay for the required licensing course, pay to take the licensing test, and pay a fee actually to get the license itself. Other charges include fingerprinting, brokerage fees, Association of Realtors dues, state fees, and so forth. And then you will have to pay for MLS access, additionally. Altogether, getting your real estate license could cost you thousands of dollars. You may be able to recover that cost after a while, but surely some of these costs are ongoing and must be factored into your plans.
In the long run, it’s imperative 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 numerous states, even the minimum number of hours required to certify can take months to complete. If you are definitely already occupied with your investing business or have various demands on your time, seeking to have a real estate license can be quite a challenge and concern. On top of that, every hour you are spending on licensing is an hour you aren’t spending growing your investment portfolio. But if in case you detect real benefits in having your real estate license, it just might be worth the investment in the short term. Hence, it’s essential to crunch the numbers carefully and be really honest relating to your intentions prior to jumping into anything that might not give you the desired return.
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