Is being a licensed realtor worth it?

[John Hovanec]

Hello bp.

I am a real estate investor in South Carolina. I do flips and buy and holds. This year while doing my taxes my cpa said it would be beneficial if my wife or I became a realtor. So I was looking to this great community to find out some positive or negative of being a realtor. Mostly tax advantages. Any info is helpful. Thanks.

[Patricia Steiner]

Do the math first on whether it makes sense to do it. It costs about $2500 to get a license in Florida (training, fees, MLS, local Realtor board, etc). Then you pay a desk fee at a Brokerage Firm - whether you're there or not (part of their profit model), and then there is a commission fee split with the firm. You cannot work your own deals...Brokers, unlike realtors, are liable for every transaction up to five years after the close/conclusion. You'll also have continuing education requirements and license renewal fees. Suffice it say, everyone's hands will be reaching for your wallet.

As a former wealth banker and a long-time investor, I can honestly say that I hated the two years as a realtor (in Florida, you're required to be a realtor for two years before you can apply for your Broker's license). I felt nickel and dimed for every "new program" the firm rolled out while hauling in a lot of business where the commission I earned was being split as well - for what appeared to be for "entertainment value" versus anything tangible. I now own my own private client firm that is investor focused and I advise my clients to do what they do well without the torment. You can achieve the same benefits of the MLS (it's not magic by any means) and more by finding an investor-focused firm - who is not actively investing for their own account (you don't need competition from your resource) - and staying focused on running your core business.

Just another opinion...