Starting a business is one of the best ways to avoid stagnant wages and start making real money. You’ll also get to leave behind your boss, choose your own hours for the most part, and enjoy a little freedom in your new lifestyle.
A career in real estate could be your next big-ticket startup venture. The startup costs tend to be low, but you’ll potentially have a lifelong career that brings in good money and lets you work flexibly. Many investors and entrepreneurs have successfully navigated this road as they’ve gotten to know an area and made thousands from commissions.
But is a real estate agency the right startup for you? Use this guide to help you make that determination.
Education and Startup Fees.
There’s little education and few fees needed to get started. You don’t need a higher education degree or fancy certifications to make your fortune in real estate. You will need to pay for a licensing exam course and test in your state, but that can be done for just a few hundred dollars. Other costs for marketing, business cards, office space, etc. will be marginal when you’re just starting out.
Although higher education is largely unnecessary, it helps if you have some kind of background in finance, business, architecture or interior design, or a related field. Most real estate agents don’t have a relevant background before getting started as an agent, and they do just fine in the business because they have the drive and motivation to do so. However, competition is high, and anything that boosts your knowledge can help with success.
Be the Boss.
If you’re starting your own agency, you’ll call all the shots on your job. Most real estate agents are independent contractors who work with clients according to their own schedules. You’re in charge of all marketing decisions, you’ll pick and choose the clients you want to work with, and your hours are your own.
It also means you have to cover all of the taxes, purchase supplies and equipment, rent an office space, provide training, offer support, develop relationships with other business entities, and perform other roles of a business owner. For some, this is freedom, and for others, this task seems daunting.
You’ll also be in charge of business growth. You don’t have anyone else to fall back on if your tactics don’t work out, but you get to take credit for all the successes. It’s important to research effective marketing and use smart business skills to promote the growth of your company.
The good news is growth in real estate can be exponential. If you’re successful in what you do, your agency can grow to international levels, experiencing high profits along the way. It’s an exciting prospect if you know how to get there.
Allow Flexibility in Your Schedule.
You choose your own hours. That means you’ll be able to make time for your kids’ baseball games and to go on vacation with your family. You can also work more or less hours each week depending on your financial goals and your situation. The flexibility is among the most attractive elements of a real estate job.
However, you must be motivated to do the work. You no longer have a boss or hard deadlines to keep you going. If you don’t work well without structure, this might not be the right job for you.
Hard Work and High Risk Ahead.
A major misconception in the realm of real estate is that being an agent is a way to make easy money. On the contrary, it will be very hard work, primarily because the competition is so high. When you work in a field with low barriers to entry, you’ll have plenty of competition, and not everyone will make it.
In fact, a 2014 National Association of Realtors report revealed that 87 percent of new agents drop out of the business after five years. Many choose to do so because they simply weren’t making enough money.
If you’re looking for easy, quick money, real estate is not the right niche for you. The majority of agents work very hard for their commissions, and it often takes them several years to establish themselves and make a comfortable income.
Potentially High Returns.
Those who stick it out through the hard years of low commissions and few returns typically see high returns in the end. The potential for profits is incredible when you break it down. Most real estate agents make three percent on a house sale or purchase (six percent if they were the agent for both). That’s an average profit of $12,000 with each sale. If you only make one sale a month, you’re looking at more than $140,000 in annual revenue.
These sales aren’t always regular, however, and most agents only make about $47,000 their first year. You’ll need money management skills and patience if you want a high salary in this field.
People Always Need Houses.
The market for real estate will never die because we’ll always need places to live. This means you’ll never have to worry about losing your job.
Additionally, the National Association of Realtors revealed that 66 percent of home buyers use the same agent or recommend them to others when buying or selling a home. So, if you’re successful with a client the first time around, you’re likely to get repeat clients.
Be a People Person.
Real estate agents have the unique role of working more closely with people than most jobs. You’ll spend a lot of time with potential homebuyers. If you’re the kind of person who can strike up a conversation easily while promoting a product, you’ll be in great shape for such a position. If the thought of talking to people regularly frightens you, a different startup venture may be better suited.
Conclusion: Should You Take the Plunge?
Each of these elements are essential to a successful career in real estate. If you don’t think you have what it takes to fulfill each role successfully, this might not be the startup venture for you.
On the other hand, you could fit in perfectly with each of these traits. If that’s the case, it’s fairly simple to get started, and you can dive into a successful real estate career. Thousands have gone down this road and found their riches and passion through their agencies.