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Do you Need a Real Estate License to Invest?
Rental investing is the new gold! Everyone is starting to realize how much you can earn from it, and literally anyone can do it!
Although we are considered “newbies” in the world of real estate investing (we don’t have dozens of properties yet), my husband and I have learned A TON during our journey thus far!
Be sure to check out: How Anyone in Their 20’s Can Begin Rental Investing Quick
My husband is in the works to obtain his real estate license – but not for the typical reason.
In general, a real estate agent is someone who gets paid for assisting people with finding a home, helps with the process of purchasing, and gets a small cut of the deal.
Yet, my husband has no intention to be a real estate agent as you’d typically think of. He instead plans on getting this license to be a full time real estate investor, and help others with properties along the way.
You most likely came across this article wondering if it is required to have a real estate license in order to invest in rental properties.
In fact, property managers and owners do not need a real estate license in order to invest and rent out properties.
There are a handful of benefits to having a real estate license when investing in rental properties, but it is not required.
We will discuss these 5 reasons why it would be helpful to have a real estate license while investing in real estate:
- Help other rent, invest and buy properties
- Access to the MLS
- Make connections with top agents
- Have more independence
- Save cash in the end
1. Help Others Rent, Invest, or Simply Buy Homes
As said before, we don’t plan on having a real estate license for the traditional reason.
However, we all have family and friends! Having a license means you can earn some extra side income by helping others buy and sell properties, even if you don’t intend on it being your reason to have a license!
2. Access to the MLS Is Great!
This is pretty much the biggest reason people push having a license.
The MLS is the master database for properties. If you haven’t seen it yourself, you’d be surprised as to how in-depth the information can be! I was blown away the first time I was shown the MLS.
On the other hand, there are plenty of options out there that you can use to analyze properties, like Zillow, DealCheck, and individual listing sites.
As an example, we bought our first properties by simply looking through Zillow every day for homes.
However, since we plan on continuing our path to building a business out of our investing (AKA having a lot of properties), having access to this database is important to get in-depth information quickly.
3. Connections with Other Agents
If you plan on owning more than just a few properties, it would be advantageous to start connecting with real estate agents who regularly find investment properties!
When purchasing our first properties, we QUICKLY learned the difference between an agent who knows about investment properties compared to what your typical buyer wants.
As new investors, making these connections will be pivotal to learn more about local suburbs, creating partnerships, and having more opportunities to make deals.
Be sure to check out this related article!: The Foundational Steps You Must Take Prior to Investing in Real Estate
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Individuals own 92% of All Rental Units
4. Far More Independence
This was my husband’s biggest reason for obtaining a real estate license.
When you get your license, you are now in control. Less phone calls, first access to properties, less time to take off work, opportunity to visit homes yourself without relying on someone else…the list goes on.
If you are strapped on time or ability to take off work from your W2 job, going to visit properties often, meeting with agents, and frequent calls can be burdensome.
With a license, you are able to do so much more on your own time. This was an important factor for us
5. Save Some Money in the End
Simply put, it takes money to become an agent and maintain a license.
During our extensive research, we’ve found varying costs for continuing education, fees, and dues. There can be hidden fees throughout.
However, by getting a license, there will be plenty of ways to save good cash along the way!
Here are some examples:
- How much is your time worth? List and access properties on your on time without back and forth communication with an agent.
- If you plan on owning a lot of properties, you will save money by keeping commissions.
- Be first in line to look at properties – this can help you save money by finding the best deals first (unlike other investors who rely only on listing sites such as Zillow)!
As mentioned above, there are costs to becoming an agent and maintaining the license.
If you plan on considering the route that my husband is taking, here are some tips:
- Take online-only classes and save yourself tons of time!
- Join a team/brokerage that allows you high commission rates
- Find a brokerage that will allow you to hang onto your license without needing to actively/regularly have clients
So, should you get your license or not?
This is a hot topic when it comes to investors who both have and don’t have real estate licenses. After our own experience with owning properties without a license, we have chosen to go down the route of obtaining a license for the reasons above and more.
But, what’s important to know is that you don’t need a license in order to buy properties and rent them out.
In fact, be sure to read this in-depth article about property management – learn why having a property manager could make your investing journey so much easier!
Having a real estate license comes with its perks and cons for us real estate investors. Be sure to do your extensive research to be sure what is best for your situation!
