Real estate investing requires multiple strategies, the right team of professionals, an understanding of how to find the best properties and markets, and learning from mistakes along the way.
One question we often hear is whether it’s necessary for real estate investors to obtain a real estate license to buy and sell properties or build a successful portfolio. While having a license can offer a few advantages, is it worth the time and effort for real estate investing? Today we provide some insights to help you answer this question for your goals and best success!
Do You Need a Real Estate License to Invest?
So, do you really need a real estate license to be a successful investor? The short answer is “no,” but let’s dig into the potential benefits of having this licensing in your back pocket.
What Are the Benefits?
As a licensed agent, you have the ability to act on your behalf when buying and selling rental properties or house flips in a specific market. That means you also gain direct access to the MLS (Multiple Listing Service) in your market—a service only available to licensed real estate professionals.
Being able to skip the “middleman” of working with an agent to close deals can feel like a significant time and money saver. You get to negotiate with other sellers and agents, set up contracts, and finalize documents required to buy and sell properties.
You also have the opportunity to make more money! If you’re not paying commissions to another agent when closing deals, you reduce expenses through the property acquisition process. Investors with a real estate license can also help other buyers and sellers find homes and make deals by working as their agent and receiving commissions.
A real estate investor with a license can also reduce the amount of time it takes to close deals. Since you’re acting on your behalf, this can expedite the negotiation and paperwork process. You don’t have to rely on the availability of your agent to make appointments for showings, closings, or contract reviews.
What Are the Downsides of Getting a Real Estate License As An Investor?
There are plenty of benefits, but many property investors skip the real estate licensing process because they don’t find it worth the time and expense, and it doesn’t fit their real estate investing strategies!
First, consider the work (and cost) of getting your license. Real estate licensing requires taking and passing required courses in your market, each requiring a cost.
Ask almost any real estate agent, and they’ll tell you that learning the required material, studying for exams, and passing courses require a significant time commitment! Depending on your market, these courses include learning legalities, ethics, and details that can make studying and passing the exam an overwhelming undertaking.
There Are Different Types of Licenses and Requirements
Which license do you need to buy and sell real estate investments? Real estate graduates can obtain various licenses, such as sales representative, broker, or associate broker licenses. Choosing the right education path and license to act as an agent in your market requires understanding the different types of licenses.
Once you pass the exam and get your license, most states require working under another broker before practicing as an independent agent. In addition to having the necessary knowledge and real estate investment strategies, graduates must work according to specific state-sanctioned standards to remain licensed.
Multiple Markets Require Multiple Licenses
If you plan to build your real estate portfolio in only one market, you’ll only need a license that pertains to that specific state’s requirements.
However, if you work through the Privy platform to explore more markets for buying and selling investment properties, you’ll need a real estate license to act on your behalf in multiple markets. A real estate license in one state doesn’t mean you’re licensed to buy and sell residential properties in multiple markets.
Consider the significant time and expense of pursuing licensing in every market where you operate as an investor and how spending time in this pursuit could take time away from finding your next deal!
Partner With Reputable Real Estate Agents Instead
When starting investing in real estate for beginners, most seasoned investors recommend partnering with reputable real estate agents instead of putting time and money toward getting licensed yourself.
With excellent agents in the markets you prefer for your investments, you have experts working on your behalf to help you find and make good deals, navigate negotiations, and grow your portfolio! As a result, you can focus on strategies and making more money instead of licensing requirements.
Find Better Deals With a Real Estate Agent and the Privy Advantage!
Getting your real estate license offers some benefits to a real estate investor in a specific market, but it’s not necessary to go through the time, hassle, and expense to find real estate investing success! Instead, choose good agents in your preferred markets and let them handle the buying and selling details for you.
Privy helps investors find new properties in their preferred markets through our software algorithm. You no longer have to be a licensed broker in a specific market to gain access to the MLS! Privy takes care of that for you, then sends potential investment properties to your inbox. Reach out soon to learn more about how it works!
Our free ebook, “How to Invest In Real Estate: A Guide,” gives more insights into investing success. Download it today!
