You probably clicked to read this article because you’re working a tedious 9-5 job that you hate. Becoming a real estate agent is one of the best options for you to escape the rat race. However, the uncertainty involved can be cowering. Couple that with the rollercoaster that the year 2020 was, and that’s enough to make you feel stuck in a dilemma.
Quitting your day job can, however, be scary because keeping a consistent paycheck can get very comfortable. Besides, real estate is not what’s portrayed on TV shows. Not everyone is made for a career in real estate. However, with consistent effort and strategies, you can cut your teeth in the game and earn a large income. There’s good money involved, but not easy money.
In this post we aim to uncover the main benefits of becoming a real estate agent that way you can decide if a career in real estate is the right fit for you and your goals.
Here are 5 Reasons you should become a real estate agent.
1- The Big Commission Checks
This could easily be the most straightforward reason why you should become a real estate agent. The real estate shows on TV glamourize the real estate career as agents going around showing properties, networking, and making giant checks.
For example, if you watch Million Dollar Listing, you probably see the agents going around collecting 100,000, 200,000, and sometimes even 300,000 dollar commission checks. That’s exciting. Especially if you are trapped in a 9-5 job you hate with a income cap. Real estate has no glass ceilings.
In real estate, you get the opportunity to bank substantial commission checks and earn a large income, which is one of the massive advantages of becoming a real estate agent.
So how does real estate commission work?
Real estate commission rates vary because they’re negotiable. However, 6% has traditionally been the average rate. Some brokerages nowadays offer rates between 4% and 5%. This percentage is from the property’s net selling price. This means you might not know the exact commission you’ll earn until the deal is closed. But you should be able to calculate a close idea.
Typically, it’s the seller pays this commission. However, most sellers tie this fee with the buying price. So, the buyer indirectly ends up paying the commission. For example, let’s say a property is agreed by all parties to sell at $250,000. If the rate is 5%, the fee is $12,500 (250,000 * 0.05). This fee is deducted from the selling price, not added to it. Under these conditions, the seller received $237,500 Net after commission and before other closing expenses. This is a simple example as we haven’t included closing costs and other fees.
This commission is further split among the listing broker, listing agent, buying broker, and buying agent. It’s divided equally in most cases, but in other contracts, one side receives more commission than the other. This money doesn’t go straight to the agents. It has to first go through the brokers, as the agents work under them.
2- Real Estate Has No Income Limit
In a regular 9-5 job, you can never just walk to your boss and ask for a raise, no matter how hard you work or the effort you put in. Well, of course, you can do that, but your raises are always upon somebody else’s discretion. Your boss still has the ability to turn your request down. You can also try to find another well-paying job, but in all honesty, you never have full control of your income in a 9-5.
Climbing the corporate ladder to earn more money is not as easy as you may think. It takes years of hard work, and the decision still lies in your bosses hands. If the bosses don’t want to promote you, then you may remain stuck on the same spot for years. There are a lot of moving pieces involved in making more money from a 9-5.
On the other hand, however, becoming a real estate agent gives you full control of your income. All you need to do is go out, hustle hard and make things happen. There’s no glass ceiling in real estate. You can make as much money as you want.
How Much Money Do Real Estate Agents Really Make?
There is really no limit to how far you can grow your business. Agents working 40 to 50 hours a week can expect to make around $68,000 on average. But you can scale your real estate business beyond five or six-figure incomes. The top 20% of agents in most markets are earning 6 figure incomes.
You can also grow to become a broker and have other agents work under you, though you need a broker’s license for this unless you start a real estate team under your current broker. You can also hire an assistant to help you with the day-to-day activities as your business scales.
What does it take to become a real estate broker?
To become a broker, you need to work at least 2 years as an agent in most states, take the state’s broker course, and take the licensing exam. Once you become a broker, you can hire salespeople for your company and other professionals to take up the managerial positions. You can then focus more on your company’s growth.
There are no limits to whichever direction you want your business to take. Some agent’s want to focus on selling and chasing the big commissions and others prefer building a company and helping other agents grow their real estate practice.
There is no right or wrong way to build your real estate business. It all comes down to you and what fits your lifestyle and personal goals best.
3- Become Your Own Boss
As a real estate agent, you are self-employed. You don’t have to report to a boss or ask someone for some time off. This means that you set your own schedule and have to be time-conscious.
This is both an advantage and a disadvantage. Some people may struggle with this, especially if they don’t have self-drive. If you fail to take care of your clients, it could be a huge downfall. The truth is that your clients are your bosses, and you have to be responsible, or you won’t have a business and you will eventually be forced back into a 9-5 job to pay the bills.
In fact, seasoned real estate agents advise that your clients should come first, even before the money. This way, you’re always going to put their needs first and the sale comes second. The money will follow later if people trust you and feel taken care of.
On the other hand, becoming your own boss and having the power and ability to call the shots in your life is huge. You can literally do what you want to do when you want to do it.
Escaping the cubicle lifestyle
Some people have a difficult time thriving in an office environment. If you want the freedom to choose where you can get the work done, this could be the career for you. As an agent, most of your days will consist of activities, such as meeting clients, seeing properties, and negotiating deals.
This means that you don’t need to have a regular 9-5 schedule. You can literally work from home, or anywhere you find most conducive for helping you focus on your daily grind. The option of working remotely can allow you to spend more time with your family and friends.
Another direct benefit of becoming your own boss is that you choose to dress how you want. Of course, you have to meet your clients in a presentable way. However, you decide what you feel most comfortable in. This can be a massive advantage if you’re not a huge fan dress codes. Remember, you have to build your brand around authenticity. You also don’t have to do something you hate. Your dressing can make you happier, effective, and more creative.
4- Investment Opportunities in Real Estate
Your work as a real estate agent makes you a local market expert. Honing your skills over time makes you quite knowledgeable. You become a consultant, and clients look for you when they need advice. You really get to know the market and get firsthand information about new deals. Some people actually get into this career to build capital to invest for long-term rental income.
Your daily effort and hustle can get you your active income. But wealth is about building passive income. Many wealthy agents take their active income and find the right deals and properties, and invest the money for long term recurring rental revenue. Though your investment portfolio can take a long time to grow, eventually, that passive income stream will be a lot more than you could ever make with your active income and help you gain financial freedom as a real estate agent.
For example, if you’re a new real estate agent making $5,000 a month. In your first year, you could buy a property that makes $1,000 a month. If you continue purchasing such properties in consecutive years, you’ll notice that it’s going to take very little time and effort to manage your portfolio. The passive income will also supersede the active income because there are only so many hours in a day for you to trade hours for dollars and hustle to make those commission checks. Where as your properties can produce income for you while you sleep.
Here are three other compelling benefits of investing in real estate as an agent:
- Access to great deals- Besides getting firsthand information about great deals from your network, you have access to the MLS database. Ordinary investors don’t have this access, and it’s, for this reason, some of them hire agents. This way, you’re assured of knowing about the best deals in the market first. If you’re interested in specific properties, You can buy them yourself for your own rental portfolio.
- Easier Financing- Many investors get stuck on finances when buying properties. As an agent, you sometimes help them secure financing through mortgages, loans, private lenders, and many other options. This helps you when you decide to invest yourself because you’re already knowledgeable with how financing works and the best financing for someone like you. Your network also gives you easy access to various options and alternatives.
- You don’t have to hire an agent- Even experienced investors hire agents to handle their investment deals. In your case, however, you don’t need to do this as you already have everything you need. You will save a lot of money that would have gone to facilitate agent’s fees and commissions.
Being a real estate agent with an investors mindset can be super lucrative. If you’re a smart agent, you’re going to find those awesome deals.
5-Networking
You’re going to meet many people through your work as a real estate agent. However, you also need to go a step further and make more effort to meet new people.
One way to do this is by attending networking events. This is really cool, yet some agents don’t do it the right way. Attending a lot of networking events allows you to meet tons of exceptional professionals like yourself.
How is attending networking events going to add value to your career? Firstly, you’re obviously going to meet people. They include business owners, investors, and other agents who’re committed and crushing it in the game. Being around these kinds of people allows you to learn a lot of things from them.
Your network is your networth.
You will make a lot of good friends just from networking. You can make the best of friends with people you meet at networking events. This is a tremendous opportunity to build great relationships with people that have the same goals as you.
Remember, most self made millionaires say that you’re the average of five people you hang around with. Always seek to surround yourself with great people who have awesome ethics, are hardworking, and want to become the best version of themselves. Your network is your net worth.
You can meet these people in the real estate community. Some of these people are very ambitious because they have 9-5 jobs yet still find time in the evening to attend networking events. Nobody that’s not ambitious will find time after work to go to these events.
Build relationships with social media
You can expand your network further by going digital. Social media is a vital tool nowadays in forming meaningful relationships. Social media presence will create opportunities for you to share your knowledge in the field, as well as learn from experts. Make sure you respond to all your platforms’ messages and queries because it can also be a marketing tool. You can also increase your visibility by posting regularly and sharing valuable insights.
You also form great relationships with your clients. Remember that in most instances, you’re helping most of them achieve their investment goals or largest purchase. Perhaps it’s that family buying their dream vacation home, a young couple purchasing their first property, or a bachelor buying the ultimate bachelor pad.
People are fond of other people who help them in crucial stages of their lives. You truly become a part of their community. Also, remember that many deals in real estate come in the form of referrals and word of mouth. So building meaningful relationships can be the key to building a successful real estate business.
Key Takeaways
Living the 9-5 life can become dull over time. Professionals looking for a challenge and a change in their lives can take up a career as a real estate agent. This presents you with many opportunities to grow your income, become your own boss and invest in great properties. Also, you get to grow your network and form remarkable relationships and make great friends that can lead you into other business opportunity’s.