You may have wondered if you should get your real estate license given that you are a Bangor single-family rental property owner or an experienced investor. To be a successful investor means you are able to reduce your costs in the long-term. You might also be thinking of the value of insider information, 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.
Saving money on commissions is the most common reason why investors want a real estate license. The thought of paying someone else a big percentage fee does not sit well with everyone. Also, if you plan to sell many properties –like if you are flipping houses– you may save yourself some money.
However, those savings are an illusion for Bangor rental property investors who plan to buy and hold properties. The truth is that it is usually the seller who pays real estate agent fees, and 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. Because this is such an important resource for properties on the market, it is a very coveted service. Although there is a free version of the listing service, it does not contain the comprehensive data that makes the MLS appealing to investors.
However, you might want to think twice if access to the MLS is your best reason for wanting a real estate license. Licensees are subject to laws regarding their rental property that they were not subject to as private investors. Access to the MLS is also not free, –not even to real estate agents. You will have to pay for the required licensing course, pay and take the licensing test, and pay for the 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. With all of this, your real estate license could actually end up costing you 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.
Before actually committing to getting a license, 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 many states, even the minimum number of hours required to certify can take months to complete. If you already have a busy investing business, committing time to get a real estate license can be a challenge. You also have to remember that 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. Crunch the numbers carefully and lay down your plans before jumping into something that may not give you your desired outcome.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.