Many choose a career in real estate because of the ability to start out with virtually no inventory.
Although start up costs are low in comparison to other industries, there is still a significant cost associated with being a real estate agent that most don’t take into account when starting out.
How Much Does it Cost to Be A Real Estate Agent?
There are many areas of which to take in to consideration when thinking of costs associated with a career in real estate.
First the cost of becoming a real estate agent. Then the start up costs, the ongoing costs and the overall business costs.
Let’s look at a basic break down of each.
How Much Does it Cost to Become a Real Estate Agent?
The cost to become a real estate agent will vary dependant upon your geographical location. Depending on your country, state or province you could be looking at very little to a substantial amount that could possibly include a degree and formal post secondary education.
To know true costs you should probably check in with your local governing bodies and real estate educational facilities. Based on my knowledge you can expect it to cost at a minimum $2000-$5000 or more to complete the courses.
Following which you will be looking at registration costs.
Registration Costs to Become a Real Estate Agent
This is again a geographical topic. Depending on where you live the costs will vary. What remains the same for most places is the fact that there is a cost to register. Some places multiple registration fees. Council, Board and even Brokerage level.
Which leads to the long list of ongoing costs to become a real estate agent.
Ongoing Costs to Become a Real Estate Agent
Let’s start with the obvious. Something that is universal. The board and brokerage fees. These unavoidable fees can vary but exist every where. A board fee is something that you pay to your local board or organization as a part of membership. In return you have access to services which include things like the MLS system and various other tools of the trade.
Next, brokerage fees. Although there are many different brokerage business models the most common you find are sliding scales of commission percentages. For example, a brokerage could charge 30% of every commission earned until a certain amount is earned and the percentage goes to 10% or sometimes nothing.
There are also flat fee and fee for service options for brokerage compensation.
Weigh your options carefully when selecting a real estate brokerage. This is the key to keeping most of your commission earned as a real estate agent.
Start Up Costs
Beyond on going fees you will need to consider all of the costs associated with starting up.
Things you will need to Start Out:
For Sale Signs
Website and Web Design
Marketing Material for Open Houses, Listings and Branding
Further training and education….
To get you started.
So you can see, although you can start a real estate career with no inventory, there are still substantial costs to become a real estate agent.
Budgeting and financial education is a necessary component to prepare for a career in real estate to avoid potential pitfalls such as debt or lack of funds to carry on every day business.
Would you like to learn more about budgeting and preparing for a career in real estate?
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