Sunday, May 03, 2009

Exploring Options in the field of Real Estate

Tomorrow, I begin the pre-licensing course work to potentially become a Real Estate agent. For the next two weeks, I will take about 2/3 of the prerequisite hours needed prior to taking the real estate licensing exam. After that, I will decide whether I like the field enough to complete the rest of the course work.

My previous experience with real estate has been purchasing two homes and being co-owner of three rental properties. In addition, I have taken some vocational courses in electrical wiring, plumbing and masonry that will help me in evaluating properties. Overall, I think I have good skills for determining the value of a property for investment purposes. When the economy recovers, I believe that real estate in our area will also recover in value.

My main reason for considering a real estate license is to be able to better identify potential good investment properties. I'm not as interested in regularly working with buyers to purchase and owners to sell. However, I'm learning that my approach may not be a sustainable option, unless I plan to invest in multiple properties, which is not the current plan.

I'm learning that the cost of maintaining a license, professional dues, and insurance is the responsibility of each agent, since they are independent contractors, i.e. self employed. The real estate broker covers most of the overhead, in return for 30 to 50% commission split. However, there is still probably a $1500 to $2500 annual out of pocket cost for the agent, which I consider too much for doing a part time business where the income is not guaranteed.

Finally, I also realize that while real estate sales has the appearance of being a flexible part time job, the reality is likely different. As with any commissioned sales position, I know I would be serving the client, which means being available according the client's schedule or needs.

In any event, taking the courses is a low risk option at this time. In addition, it will give me an opportunity to network with real estate professionals that aren't recruiting me for their firm, which will hopeful give me some less biased perspectives.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

1 comment:

Jonh said...

good job done. one can take advantage who want to explore in the field of real estate.