As either a first-time North Charleston single-family rental property owner or an experienced investor, you might have considered getting your real estate license. Long-term success in investing is dependent on your ability to reduce costs wherever you can. Insider information is also very important, especially in competitive markets. If you really believe that getting a real estate license can save you money and give you the access you want, you need to think it through first. There are both advantages and disadvantages to getting a real estate license that you should consider as an investor.
The most likely reason investors have for getting a real estate license is to save on commissions. Usually, we don’t feel so happy about the thought of paying someone a big percentage fee. And, if you really plan on selling a lot of properties (when flipping houses, for example), you might be able to save some money.
However, those savings are an illusion for North Charleston rental property investors who plan to buy and hold properties. It is the seller who usually pays the real estate agent fees, not the buyer. You must also realize that real estate agents have to work under a broker who charges either a flat fee or a commission percentage for every transaction. These fees will further reduce any perceived savings.
Alongside saving money, the access to the Multiple Listing Service (MLS) also makes getting a real estate license attractive. The MLS is an important resource for properties on the market. You can get the free version of the listing service but it wouldn’t give you the comprehensive data that makes the MLS valuable to investors.
Getting access to the MLS as your main reason for wanting a real estate license is something you should reconsider. As a licensee, your rental property might be subject to new laws that you didn’t have to think about as a private investor. Even as a real estate agent, you don’t get free access to the MLS. Aside from paying for the required licensing course, you also have to pay to take the licensing test, and finally the fee for the actual license itself Other costs include fingerprinting, brokerage fees, Association of Realtors dues, state fees, and so on. On top of that, you also have to pay to access the MLS. In all, your real estate license may actually cost you up to thousands of dollars. You may be able to recover the cost over time but as most of these costs are ongoing, you will have to factor them into your plans.
After all has been said and done, you have to ask yourself how much is your time really worth. Can you afford to spend upwards of 100 hours taking a pre-licensing course and studying for the licensing exam? In many states, even the minimum number of hours required to certify can take months to complete. If you already have a good investment business or other commitments, getting a real estate license can become a huge challenge. Every hour you spend on licensing is an hour you take away from growing your investment portfolio. If you see real benefits in getting your real estate license, it still might be worth the investment in the short term. However, it is very important to consider all the time and money involved before you commit to something that might not give you the expected returns.
Would you like to learn more about how to grow your North Charleston investment portfolio without a real estate license? Contact us online or give us a call at 843-900-4061.
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