Which trade job is most beneficial to real estate?

Question

Hi, I am a new member of this community looking to gain more knowledge about the real estate industry. My question is, which trade job would be best to pursue a career in to be most beneficial to real estate.

Leo R. · Answer

@Alex Armson generally, the things that break the most frequently at a property are plumbing, electrical, and HVAC--so if you have expertise in any of those areas, it would be useful, and could save you money.

However, if your ultimate goal is to be a successful real estate investor, then I'd say focus on becoming a real estate investor (and not a plumber / electrician / HVAC guy). All the time, money and effort you would put into becoming a tradesperson could be put into becoming a real estate investor.

Back when I was starting out, I did a lot of my own repair work on properties (mainly because I didn't have the money to pay pros). However, once you're a successful investor, it's much easier and more efficient to pay pros to do repairs for you...These days, I hire pros to do nearly all repairs. Does this cut into my bottom line? Yes. However, at this point in my career, the money I pay professionals for repairs is a relatively small piece of my operation, and my time is much better spent on other things (like spending time with friends/family, skiing, optimizing my portfolio, etc.). ...I know how to switch out a toilet, but I'd much rather pay someone to do it and spend that time enjoying life.

Moreover, the money I would have saved by becoming a tradesperson early in my investing career would be dwarfed by the money I would have lost from delaying my investing career. If I had started as a tradesperson, I might have saved myself a $5k-25k in repair bills in the first few years of owning properties...but the cost of delaying my start as an investor even by just one year would have been in the hundreds of thousands of dollars.

Consider this: a hypothetical investor has a portfolio of 5 single fam houses, each worth $500k ($2.5 mil total valuation). Every property has a mortgage, and the mortgage principle is paid down at a rate of $40k per year across the entire portfolio, and the portfolio appreciates at 2.5% per year (about $60k per year). So, between mortgage paydown and 2.5% appreciation, this investor's net worth is increasing at $100k per year just from mortgage paydown and appreciation (not including compounding effects, value adds, mortgage amortization, cashflow, or tax benefits). The investor acquired these properties in 5 years via repetitive house hacking (they house hacked a new place every year for 5 years) ...now you can see the cost of waiting to invest--if that investor had waited just 12 months to get their first property, the opportunity cost would be in the hundreds of thousands of dollars.

IMO, a primary goal of REI is making enough money so that you can buy back your time and have total freedom in deciding how you spend your time. If your goal is to be a successful real estate investor, then focus on becoming a successful real estate investor, and don't get distracted by alternative options (especially if those alternative options would produce a much smaller return than focusing on REI).

Now, having said all that...if you don't have any money, and you think that becoming a tradesperson is the best way to start making money that you can then invest in real estate...sure, that could be a great path! Tradespeople are in very high demand, and if you live in a city and you do good work, you'll probably have an endless supply of business. ...just don't take your eye off the ultimate goal (total time freedom from REI).

Good luck out there!

Mo Karim · Answer

@Alex Armson

You can't go wrong with electrical or plumbing (including HVAC). Everyone needs one. I also like that there's a small barrier to entry. Good luck!

Scott E. · Answer

If you're brand new and want the most well rounded education and exposure to real estate, I say you should become a real estate agent.

Another great option is becoming a mortgage loan officer (but with where interest rates are at, this is not the market to become an MLO)

If you insist on getting into construction and getting your hands dirty, @Mo Karim offered some good feedback. What you really need to do is figure out what there is a shortage of in your area. In my market I wouldn't get into roofing or HVAC, there's just too much competition. But electrical, demo, tiling, finish carpentry... not a lot of quality subs out there.

River Sava · Answer

I would start by asking yourself what are you interested in...

There are so many different avenues in terms of selling, financing, managing, building, etc. All are beneficial but it really is going to depend on what you see yourself doing in alignment with your skillset

Angie Russell · Answer

@Erin Church I agree. Starting off as a jack of all trades is a great way to start. @Alex Armson I suggest you try working for a contractor first. Another option is to do maintenance for apartment communities. They are trained and expected to know a little bit about everything. Good luck.

Bob Stevens · Answer

so do you want to be the contractor or the investor? You want to " swing the hammer" or oversee guys?

Eliott Elias · Answer

Any type of sales job where negotiation is also involved is the best set up for a real estate career in my opinion.

Erin Church · Answer

I like

@Mo Karim 's ideas. :) Also, if you find a small company and become a "jack of all trades" so that you're doing some framing, general repairs, light electrical and plumbing, drywall, flooring, etc, you'll likely start to learn more about the whole structure than just starting off with plumbing or electrical (although, doing either of those can give you a valuable skill that pays you well). If you start off doing "all the things", you may also start to figure out if you'd rather be an electrician or plumber.

Adam Martin · Answer

I’d say HVAC hands down.  It is one of the costlier repairs that is not too infrequent so you get a lot of bang for your buck.  It is also a good paying job that is in demand and not enough people getting into the field.  Nothing gets a tenant fired up like no heat or ac and they want it fixed now however there is frequently a wait if you don’t want o pay a huge premium.  You will see a lot of posts on various topics about people wanting to devote all their time to finding the next deal but this really is a game where you need to have money to make money and this is a good solid start.  If that doesn’t interest you I’d say a close second would be a painter those guys charge crazy rates and I paint frequently but do it myself.   it is too costly to pay for and I enjoy doing it.

Scott Mac · Answer

The one that you think will be your best bet making the most money at long term.

Being an Electrician is a totally different life experience than being a plumber or a Policeman or a Postal Employee, etc...

What kind of work to you think "suits you best" and makes enough money so you have a surplus of money based on you (and your families) standard of living.

Where can you get apprenticeship (and with whom), and how long will that last?

Good Luck!

Which trade job is most beneficial to real estate?

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