Should an Investor Get a Real Estate License?

real estate house

So many people have repeatedly asked if they should get a real estate license as investors.

First, there is no “right” answer to this question.  Below is a list of Pros and Cons  gathered from a combination from our experiences and other opinions from real estate professionals.  Based on your experience and business model as a real estate investor, it may benefit a particular group of people more than others.

Benefits:

  • Learning the pieces and parts of real estate.
  • Ability to understand techniques faster because you have a solid foundation of education.
  • As a buying tool, you’ll have access to MLS, the database of all properties listed for sale by real estate agents. It’s also a powerful tool to quickly learn market values.
  • You control your own deals. Being your own agent for your purchases and sales allows you full control over your deals. You can submit offers to and negotiate directly with listing agents.
  • You may receive commissions on properties you purchase depending on the arrangement with your broker.
  • As a selling tool, you may list your own properties on the MLS.
  • Most communities require continuing education courses if you’re licensed. Although many may say this is a pain, it’s still education.
  • What you learn in this school will stay with you your whole investing career. You’ll be able to grasp new creative investing ideas faster because you already have a solid foundation to build upon.
  • Keep in mind, as an investor, you’ll be labeled a “professional” with or without a license. You are the one who decided to become an investor. If you are ever in any kind of lawsuit, including eviction court, you will be almost automatically tattooed a real estate expert simply because you are trying to act like one.



The Drawbacks

  • Annual fees and licensing.
  • You must disclose to your sellers you’re licensed and buying for investment and/or you intend to make a profit from the purchase of their property. (This is the one a lot of anti-get-your- license folks complain about. What’s wrong with it? It simply covers your butt.)
  • The Paperwork. For the most part, only if you are representing a buyer or seller is the paperwork cumbersome. It’s cumbersome because you are their agent representing their interests. The forms to fill out are designed to protect both you and the consumer.

If you’re just getting started or you want to really begin cranking your investments, getting your license won’t hurt you. I’m encouraging you to get the education not the license. But, how can getting your license hurt you?

Sources: Article by Mike Butler; Article by J. Scott (Bigger Pockets)

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