Many people seem to think that becoming a real estate agent will give them a foot in the door to actually becoming a real estate investor. What they don’t know is the cost of becoming a real estate agent, or the fact that the average real estate agent is making minimum wage. To make money as a real estate agent, you have to be out there hustling every single day and invest even more money into your marketing efforts.
Becoming an Agent is Expensive
The upfront costs of becoming a real estate agent include but are not limited to pre-licensing course fees, membership and association fees, and educational costs. Don’t forget all of the expenses required to set up your real estate practice including real estate websites, technology for purchasing, as well as the investment in signs, business cards, and devices for your business.
No Assurance of a Salary
Compare the average salary of a real estate agent with that of a real estate investor.
According to the Bureau of Labor Statistics, the median salary of a real estate agent in 2015 was $45,610.
The nation’s leading source for comprehensive housing data, RealtyTrac, reported in it’s Home Flipping Report in May of 2016 that 6.6 percent of single family houses and condo sales in the first quarter of 2016 were flips, which is a 20% higher rate than the previous quarter and up 3 percent from just one year prior. This is the highest rate of home flips since the first quarter of 2014. In Quarter 1 of 2016, the average gross profit of flipping a house rose to an average of $58,250, the highest since 2005.
That is just one single deal. Now, if you don’t have the capital or the means to flip houses, there are other ways to invest in real estate that don’t require putting that much capital down upfront. This could be through mortgage note investing, private lending, real estate crowdfunding, or wholesaling properties.
Make the Choice That’s Right for You
Now you could either put in the investment and the upfront money to become a real estate agent for the opportunity to work as a real estate agent for another investor, or you could funnel those funds directly into an investment yourself.
While there may be a way to make real estate agents obsolete in the future with technological advances, as for now, they are still necessary. So for some, being a real estate agent might be a good match for their personality, interests, and skill set. For others, who really just want a chance at getting closer to real estate investors and real estate investment for themselves, maybe there is a more direct route that just involves immediately investing in real estate.
At the end of the day, the choice of a career that fits you or a lifestyle that has sufficiently greater gains with every deal you make, is up to you. Whether you are looking for a career that makes you happy and offers you the freedom you want and is in line with your skills and your personality, or you are really just seeking a way to become closer to the actual investing part of real estate, only you can know what your end goals are.
If you think that maybe you are more interested in going directly into real estate investing, but are looking for a way to finance that decision, you might want to look into different options within lending and financing for real estate. Liberty Commercial Capital has the experience and expertise in commercial real estate financing and lending, and will work with you and your unique situation.