Do you need to be a realtor as an investor? The short answer is no. But there are some times that it makes sense to become a licensed agent as an investor.

5 Reasons to become a Licensed Real Estate Agent:

1. Access to deals and data the MLS provides

One good reason to get your license as an investor is for the access to deals and all the data that the MLS provides. MLS is the Multiple Listing Service, and typically only agents can access it. Real estate agents can find a ton of information about currently listed properties and recently sold properties and have access to this information in real time.

2. Access to a Network of Real Estate Professionals

Another reason that you might want to consider getting your real estate license as an investor is access to other real estate professionals in the industry. Many times, a listing will just have the brokerage’s phone number. But as a realtor or real estate agent, you can log into the MLS, get the contact information for the agent that listed the property and contact them directly and say, “Hey, I’m an agent.” Many times, they’re going to be a lot more willing to talk to you than the average buyer.

3. Professional Education

There are also a lot of professional education opportunities that being an agent allows for. Sometimes, this can be considered a drawback, though, because the requirements are time consuming and can be costly.

4. You Can Save Big Money, Especially When You Sell

You can save big money as a real estate agent when you sell and sometimes even when you buy. Most brokerages will let you do at least one transaction per year. My brokerage, eXp Realty, lets you do three personal transactions a year. So you could sell three properties and not pay anyone any commission’s on those properties, which can save you a lot of money. And even sometimes when you buy you can negotiate for a better price on the property if you’re not going to take a commission as a real estate agent.

5. Being a Real Estate Professional Comes with Great Tax Benefits

Lastly, there are some really great tax benefits for being a real estate professional. The IRS defines a real estate professional as someone who spends most of their time doing real estate activities (must be at least 750 hours a year).

They don’t necessarily care if you have a real estate license but this can help. If you’re working as a real estate agent and you’re contributing 750 hours a year to agent activities, you become a real estate professional. This allows you to deduct all of your rental losses against your active income. That means that most of your rental properties show up as a loss on paper once you consider your mortgage interest (that your tenants are actually paying) and you depreciate the asset. On your tax return, this will look like a loss even though you are making income on them. You can now offset your other income with this loss, alleviating your tax burden.

On the flip side, there are two reasons I would suggest you consider before making the decision to become a licensed agent as an investor.

2 Reasons NOT to Get Your License as an Investor:

1. Time

Just to actually get your license, you have to do 30 hours of state education and 60 hours of federal education. Then, you have to study for the test, and actually take the test. Once you pass the test, you have to hang your license with a broker which can take also time and careful consideration.

By the way, I have a great team at a great brokerage. If you’re interested in joining me on my team, shoot me a message and we can chat about it! 
Join Erin’s Real Estate Team

2. Money

Lastly, the only other reason I would tell you not to become a real estate investor is because it can be really expensive.

It’s not unusual for someone to spend $3,000 just to get licensed as a real estate agent and also become a realtor. To be a REALTOR (R), you have to associate yourself with a Realtor association. And that can be really expensive. You also have monthly fees. So, if you’re not actually going to use your license and make money, and all you want to do is get access to deals, I would say that it’s not worth the investment.

So that’s it. A couple reasons to get your real estate license and a couple of reasons not to.

While your considering becoming an agent, be sure you are not detracting from your strategic plan. There are som many things you can do in this industry, and plenty of ways to make money. But, to me, the most appealing thing about this industry is the opportunity for freedom of time and money. You won’t achieve that freedom, though, unless you are creating a life you actually want to live, though! So be sure that this decision is in line with your WHY and your goals!