The Advantage of Having a Real Estate LicenseBy JD Esajian on October 14, 2013
As an investor, you want to give yourself every possible advantage. One way you can get a leg up on your competition is by obtaining your real estate license. Even if you don’t intend to show a single property, this can have residual benefits for the rest of your business. MLS access, advanced notice on bank owned property sales and the ability to network yourself with realtors in your office are all solid reasons for obtaining your real estate license. However, just because you want your license and see value in having it, it does not mean achieving it is necessarily easy.
The first hurdle you will encounter is to find a broker that will allow you to park your license with them. In order to take the test, you need a real estate broker to sponsor you and hold your license. There is no expense to the broker, so there is minimal risk on their end. However, some may be skeptical with an investor working under their license. As long as you are up front with them, in that you may list any properties that you intend to sell and will use the company for any purchases, this should be viewed as a win-win.
Having a broker in place is a start, but you still need to pass a class to take the exam. Even if you have actively participated in the real estate market, passing the exam is no sure thing. You will have to dedicate yourself to passing the local class first. If successful, you advance to the state and national licensing exams. This will take time away from your investing business, but will definitely give you a greater knowledge base for the real estate business in general.
Classes and exams come with fees and expenses. Starting with your class, your expenses will include any text books for the class, the state exam fee, the national exam fee, your real estate salesperson application, an annual license fee, MLS dues and any expenses directly associated with doing real estate. Depending on what state you are in, these could add up to well over $1000 and probably closer to $2000. However, these expenses are justified and will likely lead to more money in the end.
If you can find a broker, pass your exams and pay for your license, getting your real estate credentials can open up a few different revenue streams and new ways to get business. There are plenty of guidelines and restrictions for practicing real estate in every state, so make sure you know what you are doing before you buy or sell anything. You may find that you can make a good supplemental income in your spare time using your real estate license. At the very least, having your real estate license will give you access to updates on the MLS.
If you have the time and resources to get your license, it is a good addition for your business. The more access you have and the more knowledge of the business you have, the better chance you have of making money.