How to Know If Real Estate Is Right for You
You may wonder if getting into real estate is the right call for you, but I want to break it down simply for you.
Real estate is right for people with a strong motivation and good people skills. A career in real estate might be hard for people that thrive on consistency or struggle to work with people.
Let’s jump into specific reasons that real estate may or may not be for you.
Do You Have What It Takes to Be a Real Estate Agent?
Real estate agents have a very specific set of skills required for success. There are obviously exceptions to everything, but these skills generally indicate that somebody will be successful in real estate.
Real estate agents are known to be really enthusiastic and charismatic. These traits are beneficial in any profession, but especially in a real estate career. Generally, you are going to be talking directly to the customer, which can be hard to do correctly.
The great thing about this is that it can be learned. There are so many books, videos, and classes out there that are made for people that are looking to improve their people skills. These materials are easily accessible and range from free to thousands of dollars. If you are the type of person that struggles to influence buyers into a purchase, then real estate is going to be hard for you to make it big in. It might be a good idea to seek out ways to improve your people skills as you are working on your real estate license. Although real estate agents don’t need to attend any formal university, getting educated in people skills is always a good idea.
Even those with a lot of experience in the field are always learning new tactics. People skills are critical to the business and must be developed constantly.
Real estate is a great career for people that were formerly sales reps. When you are a real estate agent, you get paid for how many houses or properties that you sell. That commission-based pay scale can be really hard for some people, but it comes easy for those that are good at selling properties.
Obviously work ethic is important in every career. However, real estate agents require a great work ethic to a greater degree than most.
As a real estate agent, you could do almost nothing every day and still be an agent. Some brokers are more involved than others but in reality, you are on your own. If you are not motivated and end up not moving many properties then you don’t make any money. Although this is great for people that are looking for a side income, it can be really dangerous for those that may struggle to motivate themselves. Many new real estate agents have failed due to a lack of work ethic.
Much like people skills, this can be learned. You could get better at working on your own schedule, and become quite good at it. Many agents have to adjust to this type of work structure, but end up liking it more.
Long story short, as long as you feel comfortable trying to figure out how to spend your time on your own then you will do fine. There are tons of guides out there on how to be successful.
Although real estate agents are salesmen, there is a lot more to it than just that. A large part of agents jobs is to make sure that their clients are taken care of. While it may seem obvious it has to be stated; customer service is incredibly important. Clients will drive you nuts sometimes and if you can’t handle it then sadly your real estate career will be short.
Connections or Access to Technology
There is a lot of emerging technology for real estate agents to use including virtual reality, drone photography, and 3D modeling. These technologies are growing fast and agents need to keep up with them in order to be successful.
Real estate agents either need to have great connections or have access to up to date tools themselves; its as simple as that.
The Real Estate Lifestyle
The lifestyle of a real estate agent is a little different than most jobs. Like I mentioned before, you are not going to have the same type of accountability that comes with a desk job. Real estate agents choose their own schedule, and that appeals to a lot of people.
The schedule that comes with being a real estate agent can be a little strange to people that are used to the standard 9-5.
Here is a video that talks about how to structure your day as a real estate agent, and it should give you an idea of what your day is going to look like.
Obviously this is just the recommendations of one guy, but he paints a pretty clear picture of what a great real estate agent does for success. Although you will be determining your own schedule, that also means that it is on you to find clients and be successful.
Just because you get your license doesn’t mean that you are going to be instantly successful. There are so many things you need to learn and build.
A Small Business Owner
Being a real estate agent means that you are an independent contractor, which is the same as saying you are a small business owner. The success of that business depends on how you run things and how hard you work.
Being an entrepreneur is a different lifestyle than most think. You are not going to be sitting around letting people work for you. In reality, it means that you need to work harder than the other guy to ensure success.
Really, this lifestyle is different than any other job you have had before. The best thing you could do is shadow a successful real estate agent to make sure that you know exactly what you are getting into. Even if you are already a real estate agent it is a good idea to shadow successful agents so that you can develop those same skills.
Another thing to note is that you are treated like a business entity by the government. That means that you need to keep track and report your income each year which will usually mean paying taxes. You have to store money away each year so that you can pay taxes in the spring of every year.
Putting Yourself Out There
Real estate agents are salespeople, and when you are trying to sell anything you have to put yourself out there. If you are not the type that likes to put your name and face out there then this is not the job for you.
You are going to need to reach out to people so that you can have a client base. You want everybody to know that you are a real estate agent so that when they need a home sold they know to go to you. It is important to have a presence out there as a real estate agent.
The Pros and Cons of Real Estate
There are a lot of ups and downs to being a real estate agent. Understanding the pros and cons of real estate will help you understand if it is right for you.
There are a lot of reasons why being a real estate agent is amazing, but we are going to keep it fairly simple here.
A lot of people in real estate will tell you that they absolutely love working their own schedule. There is a level of independence that comes with working real estate that is hard to find. Even though you do have a broker that could be considered a boss, this relationship is not the standard employee/employer relationship.
A real estate agent is an independent contractor and uses the real estate broker monitor your deals and advise you if needed.
When you are getting paid salary or hourly, your employer’s goal is to squeeze as much work out of you as possible. In real estate, the broker’s success is only as big as your success. You get paid when they get paid. That means they want to encourage you to be successful. Some brokers are more involved than others, but they always are trying to make sure every agent under them is successful because that means they are successful.
The Sky is the Limit
With real estate, you have unlimited earning potential. What that means is that you could end up making a lot more money then you realize. There are plenty of ways that real estate agents can move up in the world if they discover that they are really good at it.
You could end up just having enough connections that you never need to do any client acquisition, or get to the point that being a broker makes more sense than being just a real estate agent.
Put simply, real estate agents can grow their business to epic proportions.
Real estate agents end up knowing a lot of people. If you are really good at your job, you will make friends with a lot of people in a lot of different careers. If you are the type of person that likes to go to the supermarket and recognize a lot of people then this is the career for you!
Being an agent is a unique opportunity to meet a lot of new people. You are put into a lot of different properties around the town, which exposes you to a lot of people.
Different Career Options
In connection to having unlimited earning potential, becoming a real estate agent actually gives you a lot of opportunities to enter other careers. Some real estate agents flip houses and manage properties for other people.
There are plenty of different career options that get unlocked by receiving your real estate license. As you get better and better at moving properties, you will see different business opportunities arise at which point you can either embrace them or decide to pass.
There are a few reasons that real estate can be a difficult field to work in. Here are some general reasons why somebody might not enjoy a career in real estate. There are more than what we have listed here, but these are the main complaints that people have about the industry. If you feel like you can deal with these then chances are you will do great as a real estate agent.
Unfortunately, real estate is not a way to get rich fast. Some people will see a lot of really early success, but that is rare.
Becoming successful in real estate can take a while. There are a lot of reasons that people are either successful or unsuccessful. The goal is to have a consistent effort that will pay off eventually, but this career is not going to work for everybody. Some people might struggle to get their real estate business off the ground, while others will see instantaneous success.
Unlike a normal desk job, you don’t know how much you are going to get paid until you actually give it a try.
If you already have a job that pays decently, real estate can be a risky career switch. Like I have stated previously, real estate can be difficult for some people. The hard part is knowing if you are going to be good at it without actually trying it.
If you quit your job to become a real estate agent, you don’t really know when you are going to be paid. It could take years before you are making a really substantial income from real estate. Some people love that they are paid by their own merits, but it can be difficult to know your hard work is going to finally pay off.
Difficult to Get Started
Frankly, it can be hard to know where to start in real estate. This is a new career and although you will need to pass the real estate licensing exam and go through a course (Depending on your state), those courses and tests will not teach you how to be successful.
You will have to figure out all the best practices in order to be successful. Luckily you will have a broker that can give you some pointers, but it is still fairly difficult.
Does Real Estate Make Sense as a Side Income?
A lot of people choose to become real estate agents because it has synergy with their current occupation. There are a lot of different professions out there, but real estate can be a great way to bolster your income. Many agents report making anywhere from 20,000-30,000 with less than 20 hours of work a week. This number increases greatly if your existing career is enhanced by having a real estate license.
It makes a lot of sense to become a real estate agent on the side as long as things line up with your current occupation. Here are some things you should know about using real estate as a side income:
Careers That Could Benefit from a Real Estate License
There are tons of careers that benefit from a real estate license, but we are going to focus on a few situations that real estate is great for.
Many contractors already have a contractor’s license, but a real estate license could enhance that business. If you are looking to expand your business into buying, renovating, and then eventually selling homes a real estate license is a great option.
Getting a real estate license is fairly simple and could extend your business’s profits greatly. Instead of simply being hired to renovate or build properties, you could purchase properties and sell them on the market yourself! That means more money in your pocket because you are cutting out the middle man.
Business expansion can be hard, but expanding into the real estate space is really easy if you have the capital. A lot of your clients that you build for will become your clients in the real estate field, and it can be a seamless transition.
The worst-case scenario here is that you spend money getting a license that you don’t use. Even if that happens you will have a greater understanding of how the real estate game works and therefore have an edge on the competition.
If you manage a property, then you can benefit a lot from getting your real estate license. Having a real estate license is a great way to build credibility, and will help you be more prepared for other possible business deals.
Property managers are people that are put in charge of property by the owner. In some states, property managers require a real estate license anyway. If you like managing properties, then having a real estate license is sure to help with getting more properties.
Real estate agents and property managers have a lot of overlap. Clients from both sides will help find more clients for the other. This type of collaboration is great when you are just starting out.
Many small business owners crave this type of opportunity.
If you own property that you rent out, then getting a real estate license is a great way to expand your business. If you ever want to sell or buy property you can take that extra profit margin for yourself.
Property owners can take their existing client base and then use those contacts to expand their real estate business. This synergy works in two ways. The first being that the clients that you have in your homes can come to you if they are looking to move. The second is that if you are helping clients find a home to live in or rent, you have places that you can show them that you own.
Having this level of business integration helps a lot, and will broaden the business on two ends.
Its worth noting in many states you have to disclose that you hold a real estate license on any of your own property transfers.
Any Other Business That You Can Choose Your Own Schedule
There are a lot of people out there with really flexible jobs. Flexible jobs are amazing and open up a lot of doors for people such as real estate. Some people are employed by somebody where they can work from home and as long as they get their work done they can choose their hours. These types of jobs are great for people wanting to get into real estate.
Real estate is a really fluid profession. Many people don’t like the fact that if the housing market crashes then they make a lot less money. Some need more consistency than that. It is for this reason that many people use real estate as a way to bolster their income instead of using it as their main source. The only way that real estate can work as a secondary income is if the potential agent has a really flexible schedule.
Agents need to have a flexible schedule because they never know when somebody wants to see the house that they are trying to sell. You could be in the middle of dinner and get a call from a potential buyer. If you are unavailable at that time, the buyers might move on to another house on the market and not do business with you.
For those that have a job that is really open, then real estate might be a perfect way to make money in your free time. Some people even start real estate in their free time and then move to full time because they realized that they are good at it and can make more money.
When Real Estate as a Side Income Gets Difficult
Plenty of different situations are not ideal for somebody to try and be a real estate agent. There are countless factors that could lead to issues down the road.
There are some careers that will make being a real estate agent hard. However, just because they are mentioned here does not mean that you cannot make it work.
50+ Hour Work Weeks
If you have a career that requires you to work 50 hours a week or more it is going to be difficult to make any headway in real estate. Some people find that they can have some success in real estate with very few hours. I, however, recommend leaving at least 20 hours a week to be dedicated to it.
If your career takes up 50 hours a week and then being an agent takes up another 20, you are working 70 hours a week. That is just not practical. Chances are, you will not be able to give real estate the necessary time to see success.
Inflexible Hours During Prime Time
A lot of the work that real estate agents do is outside of regular hours. Many clients can only go tour properties on Saturdays or in the evenings. These hours are really important, and if you are not available it might be difficult to sell properties.
If you have ever had a job where you were “on-call” then you know what it is like to be a real estate agent. You could get a phone call at any moment from somebody looking for more information on a property. If you can’t even take a call from a potential client then it is going to be difficult.
It is hard to quantify the stress of having to be working at all times, but in reality, it is not that bad.
Another problem that people have with real estate is that the earnings are not consistent. If you are used to getting a consistent paycheck every month, then real estate is going to be hard for you.
You will need to transition into living on your own success. If the market slows down, so does your income. When you want to take time off, you will not be paid. Some people know how to use their time effectively and can earn a lot with less time. Some people will need to dedicate more hours than others to be successful, and that is just how it is.
So How Do You Know If Real Estate Is Right for You?
Well, the truth is its hard to determine if real estate is truly right for you, there is no exact formula. But what I can tell you is that real estate is right for people with a strong motivation and good people skills. If you have a good work ethic and want to be a real estate agent chances are you’ll make a great one!
If you are interested in real estate but not sold on being a real estate agent look into our article on 15 Non-Traditional Real Estate Careers.