The real estate industry plays a huge role in the most important buying decisions of our lives. Especially, the real estate agents are the ones who shepherd us through an overwhelming process of buying, selling, leasing or renting a house.
It also comes with the gut-wrenching cheap thrill of selling a haunted house. If you’re crazy enough to get into real estate and felt like- “ you know what I’ll give this a shot”, then read this article to find the best opportunities in the real estate business.
What is it Like to Start a Career in Real Estate? How to Become a Real Estate Agent?
First of all, let me put a disclaimer out here, Being a real estate agent is simply not easy at all. It’s the toughest there is.
For those of you who think being a real estate agent is all about wearing a pressed suit and looking sharp, you’re far from the truth. You have to keep testing yourself mentally and physically against all odds.
Real estate is not an industry where you can earn fast money within a year or so but it can be a strong business with the potential to earn high-end incomes and an exciting lifestyle.
Before knowing about a career in real estate it’s better to be familiar with what exactly a real estate is-
Real estate is defined as the property, land, buildings, and air rights above land, and underground rights below the land.
It can be a fragile balance of doing the right things at the right times. You need a plan of action. Also, you require a bolstering work ethic and a realistic budget to get on with it.
Now let’s see the requirements to become a real estate agent–
1. Age Limit 18
The first baby step to becoming a real estate agent is you have to be 18 years old or more. By chance, if you’re younger then start learning the things related in real estate like sales.
Check with your state’s requirement procedure for the application process, fees, education requirements and so on.
2. Pre-License Education
Doesn’t matter where you live, you have to take a pre-licensing course in a reputed real estate licensing school before taking the actual license exam.
Also, there is a required number of hours to sit in classes, it may vary from state to state.
3. Pass Real Estate Examination
You have to follow the application process on schedule. Check with the real estate regulatory authority for complete details and specifications.
Prepare yourself steadfastly for this exam because not everyone is entitled to pass this exam at the first try. Just show up at the exam center with your cheerful and positive attitude and walk out with passing grades.
4. Find a Real Estate Broker
Just because you passed the exam doesn’t mean you can immediately get the license to become one. Firstly consider finding one real estate broker when you’re busy applying for the licensing process itself.
You both need to complete some legal paperwork and then your license will be approved once the form is accepted.
Do I need any College Degree to Become a Real Estate Agent? Are There Any Special Skills Required?
Most often, you don’t need any college degree or certification to become a real estate agent or to get careers in real estate. But completing a bachelor’s or associate’s program does help to stay competitive in the field.
How to become a real estate agent?
To start with you need a client who wants to buy a property and secondly, you need inventory i.e the properties on the block available for sale.
So the matter is cleared, do we need any special skills to become a real estate agent?
As a matter of fact, yes, you do need special skills. In real estate the biggest enemy we have is ourselves. Because there are friends and families who discourage this profession, and the statistics are also against them saying 87% agents fail.
It’s sad really, that’s why you need to have the right mindset sales. That’s right, real estate is all about direct sales. It’s all about communicating effectively with clients, buyers, and sellers.
You only get paid in real estate by commissions for each house you sell as a closure. No hourly wage or salary. If you sell, you get paid, if you sell a lot more, BOOM, you’re good and get paid a lot. That’s how real estate jobs are!
But then if you don’t sell any then no pay, which is why there is the highest percentage of failure rate.
Now for the skills part, apart from the excellent selling skills you need –
- Communication skills because you’ll have to be negotiating deals or working up your network to find more leads and that involves a lot more talking.
- Organizational skills- You got to keep a close eye on paperwork, scheduling the closure, coordinating financing, it all requires excellent organizational skills to be on track.
- Problem-Solving – Homes don’t sell themselves, hence to successfully sell them it’s better if you’re a great problem solver with a side of creativity and resourcefulness.
- Honesty and tact – Clients always want someone who is honest and with amazing ethical practices. Wouldn’t you agree?
- Self-motivation – Hard work and consistency is what takes to reach on the top status for real estate agents. You need self-motivation to keep working hard and handle the pressure involved in sales.
How is the Real Estate Market Categorized? And How Does it Work?
The main categories of real estate are listed below-
1. Vacant Land
Obviously land is the baseline for all types of property. It basically refers to undeveloped property and bare land. So the developers come into the picture, acquiring the land and assemble it with other properties and rezone it.
Residential is normally housing for individuals and families. This is the most common type that people are familiar with. There are apartments, condominiums, townhouses and other types of living arrangements also.
Commercial properties are land and building used for operational and commercial purposes like shopping malls, office buildings, medical centers, hotels, and parking hotels.
This category is used by the industrial businesses for activities such as research and development, small and large scale industries, transportation, logistics, warehousing, etc.
Agricultural land is left for agricultural activities.
How Do I Start Investing in Real Estate? Is Real Estate a Good Investment?
Being a landlord isn’t always easy, you get calls about bugs and plumbing problems all the time. Maybe it doesn’t look like a glamorous real estate job to you.
If you do it right real estate investment can be lucrative. It will diversify your existing portfolio. It doesn’t require you to appear up at tenants each and every beck and call. How to invest in real estate?
1. Buy REITs
If you want to invest in real estate but without the physical real estate, then real estate investment trust is the best choice. It’s like mutual funds but owning commercial real estates such as office buildings, apartments, and hotels.
The dividends are high and most of them prefer it for retirement investment. You can purchase it through an online broker also.
2. Online Real Estate Platform
Online real estate platforms connect real estate developers to investors who want to take p projects, either debt or equity. A lot is at risk here because to get high returns, of course, you have to have a lot on stake right.
But the problem is that to make money in an online platform you need a huge amount to finance it.
3. Invest in Rental Properties
If you see a 4 bedroom apartment and rent the other three rooms for rent keeping one for yourself, that is investing in rental property. It’s like living in your own investment property while renting out rooms or units from the multi-unit buildings.
4. Fix up and Resell Properties
This type of investment is simple to understand because you purchase an under-priced home that is direly in need of some love and renovation and renovate as inexpensively as possible to make it look like eye candy.
But the problem is you need an experienced partner here, there’s no way you can calculate the math behind the costs and repairs. Not an easy thing to do.
5. Rent Out a Room
This is the most exciting part of real estate business, you must rent a part of your home via a site like Airbnb. And the potential renters can occupy the remaining space.
Don’t worry about the protection against damages, Airbnb will somewhat pre-screen the renters acting as a guaranteed host.
What Are The Best Books On Real Estate Investing? Are They Helpful?
Real estates have different nuances to learn. So real estate investment books can offer a deep understanding and overview of how and why it works.
My first choice would be the Best General Real Estate Investing Book: Rich Dad, Poor Dad. The books an amazing tool to help you understand investing in tangible assets like real estate and small businesses.
By reading this book I always thought that Richard McDonald, founder of McDonald’s as a seller, businessman, and manufacturer probably, but also he is a real estate investor who expanded his business throughout the world.
Robert Kiyosaki, author of Rich Dad Poor Dad explains how important it is to get financially independent.
Other books are The Intelligent REIT Investor and The Millionaire rEal estate Investor which are very helpful in providing information and guide you to invest in real estate.
What Are The Best Real Estate Investment Opportunities in 2020?
Real estate has always been and always will be a splendid investment offering because It’s relatively stable and profitable than any other investment.
1. Real Estate Mutual Funds
Real estate mutual funds are an investment that will benefit from the trend of profitably in the sector. Find the one which has consistently made profits from year to year and which type of investment you find promising.
2. Real Estate Investment Trust
As I’ve mentioned earlier investing in REITs is a great way to earn profits. But only consider when you have significant experience in investing.
Also, it’s better to invest in public REITs as the private ones tend to be more flexible which in turn is a great risk.
3. Short Term Rentals
Yes, as you’re wondering rental property is one of the safest investments you can dive into real estate investments. Renting out the property can bring you an attractive income.
I believe that people will leap at this opportunity. Short term rental services like Airbnb have made it a lot easier.
4. Investments in Real Estate-Focused Companies
Nowadays with the advent of AI and other technological advances, there is a killing competition to enter real estate servicing companies. If you find any promising company in this sphere, throw your ax.
5. Real Estate Notes
It’s a new form of investment where 2 parties come to an agreement on a transaction that makes one party responsible to purchase the property. Whoever is the holder of real estate receives repayment no matter who financed it originally.
What Are The Best Ways to Evaluate Commercial Real Estate Opportunities? Are There Any Benefits in Investing Commercial Property?
Commercial property’s value always depends upon the appraised value of the building and finding that value is not a simple matter. Why? Because they are highly dependent upon the uncontrollable and unpredictable element like market price.
Best ways to evaluate commercial real estate properties are-
- Cost approach
2. Sales comparison approach
3. Income capitalization approach
4. Value per gross rent multiplier
5. Value per door
Where can I View the Historical Data of Property Rates? How do I find the Value of My Property?
You can find accurate real estate historical property rates on investing.com.
Now, How do I find the value of my property? There are 2 methods to conclude the valuation of property, now let us consider the marketing valuation method-
- Go to real estate portals like 99Acres to find many properties within your locality.
- Make a list of properties you find and their sale prices.
- Calculate the selling rate for each property and the variation for all property should be 10% roughly.
- Take an average of all selling rates and multiply by the square kilometer to arrive at a valuation of your property.
- Match the result with other websites.
The Bottom Line
The demand for owning land has not changed for centuries. There was a time where kingdoms used to fight battles for possessing the lands. But now it has taken quite a modern trend.
Having their own residences is the dream of everyone and fulfilling them can give satisfaction and monetary joy.
Although it is possible to get carried away by the seduction of profits to invest in real estate markets, some actually invest in estates which offers no returns blinded by their excitement.
So considering the risk factors and staying alert you can make a fortune in real estate investment.
When are you going to start a career in the real estate business? Please tell us in the comment section.
1. What is the 1% rule in Real Estate?
1% rule is used to determine whether the monthly rent earned from and investment property will exceed the property’s monthly mortgage payment or not.
2. Is real estate a good investment?
Yes, real estate is generally a great investment option because it can generate passive income and can be a good choice for long term investment.
3. What is the average rate of return in real estate investments?
The average ROI differs based on property investment strategies. Residential ahs average ROI of 10.6%, commercial has 9.5% and REITs 11.8%.
4. Which real estate is best for real estate?
Zillow, Realtor.com, Redfin, Trulia, MLS are some of the best real estate agent websites.
5. Do real estate agents make a lot of money?
Beginner real estate agents sell few houses and make less money. But on average agents, can earn $45990 each year.