Investing in property is a great strategy for those looking to build on an already solid financial foundation, but if you really want to get the most out of this type of wealth building, it’s worth looking at getting your Real Estate License as an Investor. This may seem an odd concept as you’re looking to buy, not sell, property, but there are a whole host of benefits to being licensed.
Strong Networks Support Strong Profits
While television would have us believe that all real estate agents hate each other, this isn’t the case. As with any industry, there will be a bit of competition between those who are working with the same property types in any given area, but commercial real estate agents, for example, can be great friends for those licensed for dealing in residential property. You can point each other in the right direction if you ever decide to purchase within the other’s field. A strong network also means that you may gain access to exclusive deals, and as there is always someone more experienced, it’s a great learning opportunity.
Savings Breed Profits
If you’re regularly buying and selling property, agent fees can add up quite quickly. If you’re your own agent, however, you can save a decent chunk of cash that can be considered profit. You could also look at acting as an agent for properties that you don’t have a vested interest in, which will bring in further profits that you wouldn’t have been able to access had you not had your license.
Just make sure that you have a good tax agent on your side as the more income streams you maintain, the more complicated the end of the financial year will become. All that extra income can be a big red flag with the tax office if it isn’t correctly reported and covered off in your statements and return.
Better Understanding Means Fewer Mistakes
Even those who have been in the real estate game for years are capable of making a bad investment when it comes to investing in property, and beginner mistakes are particularly common. Something as simple as misunderstanding a contract clause (or forgetting to add in an important one if you’re writing your own) can cost you massively, so it’s important to minimize mistakes.
The great thing about having your real estate license as an investor is that you’ll gain a better understanding of the industry as a whole. This exposes you to more learning opportunities, generally with lower risk, and means that you can more easily identify any stopping points or issues that arise within your own deals.
Early Access Seals Deals
Finally, early access to new listings is possibly one of the most significant benefits to come from having your license. Where previously you would have had to wait for an agent to take on the property and get the listing sent out, you’ll now be alerted as soon as properties are registered for sale on the MLS. This can be a major money saver but could also be the difference between securing a property that catches your interest or losing it to another investor who got in a little faster.
Diversifying your portfolio is critical to your success in any form of investment, but it doesn’t always equate to having your options open on the stock market. By holding your real estate license and having a stake in multiple parts of the metaphorical pie, you can greatly improve your knowledge and returns, so it’s certainly something to consider.
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