Real Estate Investing: The Cons of Getting Licensed

by Jeff Minter

We previously discussed some of the pros to having your license when it comes to investing in real estate; let's discuss some cons.

1. First of all, the time and cost to get your license and start working could be a challenge up front.

You'll need to pay for and complete 72 hours of coursework and pass the test.
After you pass the test you'll need to pay for your license.
You'll need to sign up with local, state and national associations and pay all of their fees along with any initial startup costs required by your broker.
Your broker may also require a monthly fee, even if you aren't closing any sales.

2. Another issue to consider is that just because you pass the test does not mean you have the skills to do the job. The state test is largely legal information and does not give you any real world information or experience regarding working in the industry. Without proper training, it may take a couple of years and multiple deals before you feel confident going solo.

3. You also have to budget for the out-of-pocket expenses it'll take to get your business up and running. Marketing, signs, photography and video work, print material - the list goes on and on. All real estate expenses will be paid out of your pocket - and remember, you don't get paid anything if you don't get to the closing table.

Once all things are considered, most investors are not interested in pursuing a career in sales and are better off finding a good, qualified real estate agent they can add to their team of professionals.

That's where we can offer our expertise - we are happy to put it to work for our investors. Let's talk soon.