The real estate market is competitive -- especially if you're in the single-family game. With inventory at record lows on these properties, the sector is now more competitive than ever. And investors everywhere are finding it hard to locate not only great deals but also properties in the first place.
One move that could possibly give you a leg up is to attend a real estate school. By going to school to secure your real estate license, you could gain early access to up-and-coming properties, speed up the deals you do find, and most importantly, make more cash in the process.
But as with anything, the move's not without drawbacks. Are you on the fence about attending real estate school as an investor? Let's dig in deeper.
The benefits of real estate school for investors
The biggest perk of getting your real estate license is that it will save you on commission. If you're someone who does lots of deals -- like a home flipper or regular rental property investor -- then this can be big. Listing agents typically take 6% of your sales price (so, for example, $15,000 on a $250,000 home), which can cut significantly into your profit margins.
Another benefit is that you'll get access to a multiple listing service (MLS) with that license. MLS access can help you find deals more easily and give you more control over your rental and for-sale listings.
On the downside, there are costs to think about. In Texas, for example, it costs about $1,000 to get your license -- and that includes your application, pre-licensing course, and state exam fees. On top of those, there are annual fees to maintain your license and meet continuing education requirements.
There's also the extra work involved, not just with the school but also if you plan to use your license in a practical way. Marketing a property or negotiating transactions are no quick or easy feats -- and they will definitely take time away from other aspects of your investing business.
Finally, to use your license, you'll have to work under a real estate broker. That comes with additional fees and obligations, too. Those are just a few more things that can distract from the most important task at hand: growing your investment portfolio.
What to look for in a real estate school
If you do decide that going to real estate school is a good move for your investing goals, then do your research before deciding where you'll attend.
You'll want to consider the following:
- Teaching methods: Are there online class options or only in-person classes? What is the time commitment like? You'll need to make sure it works with your learning style, schedule, and bandwidth.
- Reputation: Is the school widely known in the local real estate industry? Does it have great graduates they can point you to? You might consider talking with a few local real estate professionals for some recommendations.
- Experience: How long has the school been in business? Does it have the proper licensing and credentials? You can check with your state's real estate commission to be sure.
- Support: What kind of support does it offer students? Are there networking opportunities, a licensing-exam prep course, or mentoring programs? These can help you get even more from your education.
Though an online real estate school can be a convenient option, going somewhere local can be smart, too. It could give you insider knowledge about the local market, state requirements, and other insights you'll need to be successful in the area.
Real estate school not an option? Try this
If going to real estate school or getting your license isn't an option (time- or price-wise), there are still plenty of ways to grow your skill set and improve your business.
For one, you could take just a single real estate course on topics such as digital marketing, listing photography, price analysis, or real estate investment trust (REIT) investing. These types of courses are often offered through real estate schools or online through continuing education (CE) schools. Places like Udemy and Ed2Go or your local community college can also be good places to look for CE courses and real estate classes.
You could also try a mentoring program or course through a well-known real estate investor. Lots of big names have proprietary programs you can join, and often, these are offered 100% online, too (especially during COVID).
Finally, you can try extension schools. The Harvard Extension School, for example, has certification programs that are less time-intensive than licensing programs. They also afford you the ability to spread out your real estate education over a longer period of time. (There's even an investing program you can consider.)
The Millionacres bottom line
Going to real estate school can certainly offer some benefits, but it's not right for everyone. When in doubt, talk to a local real estate agent about the work and costs it will entail. Then, consider how the move would fit into your long-term goals as an investor. Only you can decide whether the move is right for your real estate career.