When considering a career in real estate, it’s important to weigh the pros and cons. Real estate can be an excellent option for people looking to be their own boss, have a flexible schedule, and have unlimited earning potential. But, it can also be very challenging to work evenings and weekends, engage with difficult clients, and work through a shifting market. To help you decide if a career in real estate is right for you, we created a list of pros and cons.
Flexibility in schedule.
One of the top reasons people get into real estate is to have complete control over their own schedule. Real estate is not a 9 – 5, clock-in and clock-out job. By being an independent contractor (salesperson), a real estate agent is essentially their own boss, and can decide when and when not to work. This creates flexibility to arrange their day so they can attend family events, be home when the kids get home from school, or take care of Doctor appointments. The flexibility also allows agents to be available when buyers and sellers are available for meetings or showings. Oftentimes this is in the evenings and weekends.
Working as an entrepreneur. Being your own boss.
Because real estate agents are independent contractors, they have complete control of their business. They make all of the decisions, put together business plans, manage budgets, execute marketing strategies, and much more. REALTORS® are the CEO, CFO, and COO of their businesses.
Unlimited income potential.
Being a real estate salesperson means earning 100% of their salary from commission. There are no hourly wages or set salary ranges. Their income is largely dictated by the time they invest in their clients and the business. REALTORS® who typically worked less than 20 hours a week had a median gross income of $8,930 a year and those who worked 60 or more hours per week had a median gross income of $102,630 according to the National Association of REALTORS® 2018 Member Profile.
Help people purchase their largest asset.
To be a real estate agent, one must be entrepreneurially-minded, be willing to work outside of the typical 9-5, and have a customer-service mindset. Serving buyers and sellers, and eventually serving their friends and family through a referral-based business, should be a driving force for any agent’s business. People need a guide to help them navigate through the buying and selling of their largest asset in their lives. The real estate process can be tricky, complicated, and stressful, and people turn to REALTORS® for help.
Make an impact in the community.
With the flexibility in your work schedule and the income potential with real estate sales, connecting to the community and making an impact can be an easier task. This could be volunteering at a local food pantry, coaching school athletics, donating towards a winter coat drive, or helping others in need.
No set hours, working more hours.
Yes, real estate is not a 9-5 job. Yes, real estate can involve having a flexible schedule, but a flexible schedule in real estate means being flexible to the client’s needs. Most agents tend to work when everyone else is not, including evenings and weekends. Oftentimes, when a client calls, agents drop everything and are attentive to their needs.
100% commission. Cash flow is not steady.
The income an agent receives is solely related to the number of real estate transactions that the agent is involved in. This can be a scary reality for new agents just getting into the business who are chasing leads and working to build a referral-based business. In addition to the unknown paycheck, real estate agents have to track all of their expenses (for budgeting and tax purposes) and pay for health care benefits.
REALTORS® with 16 years or more experience had a median gross income of $78,850 compared to REALTORS® with 2 years or less experience that had a median gross income of $8,330, according to the National Association of REALTORS® 2018 Member Profile.
Buying and selling can be stressful for your clients, and for you.
Real estate is an emotional business and buying and selling the largest asset in a person’s life can be stressful. Clients have different personalities, needs, and perceptions of agents. This can directly impact an agent’s relationship with them. In addition to the stress of clients, there is always another agent on the other side of the transaction. That agent may have less experience, work part-time, have poor communication, or might be in real estate only for the paycheck. Negotiating and working with that agent can create frustration for other agents and their clients.
Seasonality. Busy in summer months, slower in winter.
In many states that experience all four seasons, real estate tends to be slower and have fewer sales in the winter months. All agents need to be aware of this and adjust their budgets accordingly. Agents must be smart with budgeting and forecasting.
There is so much more to consider when choosing a brokerage. The 4 main key components you should think through are the brokerages training, culture, brand, and costs/commissions. In order to become a realtor one of the very first things you learn is that you must hang your license with an existing brokerage.
Preparing for the Real Estate Exam is definitely a daunting task (at least feels that way). The best advice is to think about what methods really worked for you to study when taking tests in school. For example, some are good with memorization – so flashcards & repetition within the hours leading up to the test can be really helpful.
As is true when launching your own company within any industry, initial start-up costs are to be expected. In real estate, budgeting for those costs can be vital to launching your career as a financially sound business person. Start-up costs can vary, depending on the state, local MLS, and brokerage in which you’re joining. You should be prepared to spend a significant amount of money during this initial licensing time period.