Do I Need A Real Estate License To Begin Buying Real Estate For Investment Purposes?

It is sensible to want to start your real estate investment journey strong, and to do that, you might be asking yourself if you need a real estate license. We all want to get the most out of our investments, and we might look for different ways that don’t revolve around stalking the market or studying locations. Using all the resources available to you to get the most out of your investments is not a bad tactic. So, let’s go over if you need a real estate license and what it means for your properties.?

The Short Answer — No.

To invest in real estate as a whole, you do not need a real estate license. No legal barrier is holding you back from investing in one or a handful of properties in your area. A real estate license is not required, but it can benefit you if you have the time and funds to put toward it when diversifying your portfolio.?

But There Are Benefits

One of the most significant benefits of obtaining a real estate license is gaining access to the Multiple Listing Service (MLS). This is a program that shows you data on currently active sales as well as deals, pending properties, and withdrawn sales. Having this access can give you information on average prices in and around your area and show you who the owners of the properties are, how much they paid for the property, and how much they pay for the mortgage. All of this information can give you a giant step ahead of everyone else around you and allow you to make informed decisions.?

You will receive the commission if you sell that property as a real estate agent. This extra income can be extremely valuable if you regularly do high-volume deals. Then, if you choose to sell your investment property down the road, you can save money by listing it through yourself and getting the commission.?

Having a real estate license also allows you to be in control of the deal itself. You can control how the property gets marketed, what it looks like for showings, and all communication between third parties, such as agents, lenders, and inspectors. The most important control you have is your time. If you find that a property went up on the market in the middle of the night, you have complete control over writing your offer then and there and submitting it. You do not need to wait for the next day or for someone to do it for you.?

Possible Negatives of Getting a License

Obtaining and maintaining a real estate license can be an expensive endeavor. Typical fees you may experience are MLS, broker, lockbox, and realtor designation fees. If you don’t add to your portfolio often and have year gaps between purchases, you may be racking up fees on the side.?

Being the real estate agent for the properties also gives you more responsibility for the property itself. You are held to a higher ethical standard than if you were just an investor. You must watch what you do or say when dealing with third parties, as if the wrong thing is portrayed, legal punishments can occur.?

Lastly, if you choose to be the real estate agent for your own investments, be ready to have a lot of time taken out of your day. It is time-consuming to deal with the legalities of being a real estate agent while selling and buying a property. You must handle legal documents, paperwork, negotiations, and all communication between every third party and individual involved. This can be much more strenuous than simply buying the property through someone else.?

Ultimately, the choice is yours whether or not you want to get a real estate license to continue your investments. If you have questions or want to start your real estate investment journey today, send me a message or reach out to the team at KC Investor Funding.?

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