The year of 2021, and I suspect into 2022, has many people wondering if real estate is a good career and if it might be a fit for them. So, are wondering if real estate is right for you?
Then, read on.
Perhaps you came to this point in your life because your kids are finally all grown up and you’re looking to get back into the workforce. Maybe you just retired and you’re thinking about what you can do in your retirement.
Maybe you’re tired of working in a “care profession”, like nursing, and you wish to have less stress while still being able to use your skills in compassion.
Or, perhaps you’re just tired of working for Corporate America and you’re wishing to capture some of your time back.
Whatever the reason, welcome.
Consider me your “tour guide” in helping you evaluate if real estate is a good career choice for you.
In this article, we will discuss how you should evaluate if a career in real estate is right for you, the pros and cons of the profession, and how you can find the role in real estate that is the best fit for you.
Let’s go.
Avoid Taking Any “Is Real Estate A Fit” Quizzes
You will find fun little quizzes on the internet that promise to tell you if real estate is a good career choice for you. All you have to do is answer a few questions.
Bam! Instant results.
Unfortunately, all real estate career tests are saturated with problems, making them useless. They should not be used in helping you decide if being a real estate agent is right for you.
Fun to take? Absolutely.
Useful? Not in the least bit.
Seriously, avoid the temptation.
Real Estate Can’t Be Put In A Box
Real estate doesn’t fit in a neat little box. The field is composed of many different fields and opportunities. Each one requires its own set of skills, personalities, and resources.
For example, commercial real estate requires a different skill set than residential real estate. A commercial agent will need to know how to forecast income and profit for a property to determine a value. They will also need to be familiar with contract terms, like net lease.
Looking specifically into residential real estate, you will find successful real estate agents of all kinds with different personality types.
All of the real estate career tests try to determine if you’re a good fit based on your interests and personality. The test would argue that some people are a good fit and others are not.
I don’t believe that.
I can almost guarantee that whatever your personality is or your interests, there is a field of real estate that you are a good fit for.
It’s less about if real estate is a good career for you and what kind of work in real estate would be a good career for you.
Confirmation Bias In These Tests
Confirmation bias is defined as the tendency to search, favor, interpret, or recall information in a way that confirms our own belief system.
Like most career tests, a real estate career test will reflect back to you what you already believe.
Simply stated: these career tests are a form of confirmation bias. They tell us what we want.
If you believe that a real estate career isn’t a good fit for you, then you’re going to answer the questions in a way that leads to a result that confirms real estate is a poor career choice for you.
The opposite is also true. If you believe it’s a good fit, you will get results that affirm that.
Most users who get a result that doesn’t support their belief will do one of two things:
- Retake the test until they get the answer they want.
- Or, dismiss the test as silly and stupid.
Different Tests, Different Results
A good test is one that is both reliable and valid. In statistical terms, that means the test must be able to consistently and accurately assess whether people are a good fit for a career in real estate.
Take several real estate career tests and you will likely get wildly different answers. The tests are inconsistent.
For fun, I took these exams. A little over half of them said I was built for a career in real estate. The other half said I was a poor fit for real estate.
A bit surprising as I enjoy my career in the real estate industry.
How are you supposed to know which test is accurate and the one to believe?
How Do I Know Real Estate Is For Me?
Those self-assessment tools are fun to take, but shouldn’t be used to make an important decision like your career.
Since I’m an analytical kind of guy, I want to share with you information and a process for deciding if real estate is a good career for you.
Determine the best, for you, real estate categories or niches (e.g., buyer’s agent, seller’s agent, probate realtor, selling horse properties, etc.)
Narrow down the list to eventually determine your number 1 role and career option in real estate.
When evaluating each real estate career option, you will need to consider various characteristics. For example:
- Your personality
- Daily tasks
- Needed skills
- Your resources
- Career aspirations and desires
In this article, I am going to bring forward some hard truths so you can evaluate if the career is right for you.
I have done my best to categorize different characteristics of the industry into a pro and con list, but because of the various roles in real estate, there is a lot of gray area.
Most of what you read will consider real estate from a generalist perspective. A general real estate agent that works with home buyers and sellers.
However, it’s important to understand that some of these characters may be more or less important in certain areas of real estate.
The Pros Of Being A Real Estate Agent
Being a real estate agent can be a fun and rewarding career. I’m going to share some of the reasons I love being a real estate agent and why people are attracted to this industry.
Having A Flexible Schedule
This is by far the most popular reason for picking real estate as a career. People love getting into real estate because of the flexibility.
Work when they want. Set their own schedule.
It’s easy to find people who are burnt out from Corporate America and want to be more in control of their time. You can also find people who need flexibility, like a mom of three who can’t work a traditional 9 to 5 job because she has to be there to pick up her kids from school.
Ah, the dream…
… throw off the shackles of your alarm clock, your boss, and Corporate America. Welcome to the free world of creating your own schedule and spending your day how you want.
Not Always An Office Job
I’m not an office or cubicle kind of a guy. It suffocates me. I always enjoy when I can be out in the field and out of the office.
A career in real estate provides you with an opportunity to get out from behind your desk. You will meet with clients and show them homes. Inspections need to be completed and it’s generally a good idea to attend those.
Pictures for a listing need to be taken. Signs need to be put up.
Depending on how you work in real estate, all of these tasks provide opportunities for getting out of the office.
High Income Potential
The second-most common reason people get into this industry is because of the earning potential.
Theoretically, there is no cap on your income. Your income will be directly tied to your effort, your focus on the right tasks, applied leverage and systems, and a bit of luck.
It’s not uncommon for well-established successful real estate agents to earn over six-figures in a modest real estate market. You have the opportunity to grow your business and income by adding an assistant or getting other licensed real estate agents to work for you.
Your income is in your control. It isn’t limited by an hourly wage or a salary range.
Quick and Easy To Get Licensed
In most states, getting a real estate license is simple and quick. At least compared to getting a college degree or some other qualifications.
For example, becoming a real estate agent in Michigan requires you to take a 40 hour pre-licensure course. After that, you’re eligible to sit for your real estate exam. Once you pass, you can apply for your license with the state of Michigan.
That’s it. You have a license to practice real estate and you’re in the profession.
Compare that to spending four years going to nursing school to complete a BSN and receive your RN license.
The Cons Of Being A Real Estate Agent
A career in real estate isn’t all sunshine and rainbows. It can be stormy clouds and murder hornets, too. For all of the pros, there are several cons.
Let’s explore each of those cons to a real estate career.
Not All In Control
Yeah, remember how I said a real estate career can offer flexibility in your schedule? That’s not fully accurate.
While it is true, you do have the option to set your schedule, it can come at cost — namely your income.
The reality is that, for example, a client will text or call you on Thursday evenings requesting you to show them a home this coming weekend. Unless you want to provide poor service or miss out on a commission check, your butt is going to be showing homes to buyers on the weekend.
You may have given up your boss, but you have a new boss: your clients. If you’re not worried about your income, then of course you could take the clients that only suit you and your schedule.
Expect to work nights and weekends. Make sure your spouse and kids are on board with this or it’s going to be a long road.
Second, a real estate career is still a job. You have to hit certain metrics if you want to achieve certain results, regardless of how much or little you wish to earn.
There are:
- A certain number of phone calls to make
- Marketing activities to do
- Transactions to process
You will need to allocate enough time to the activities required to hit your income goals and achieve your career goals.
It’s Expensive
While getting your Michigan real estate license is rather straightforward and easy, being a real estate agent is not. It can be expensive to be a real estate agent.
Some expenses you can expect to have:
- National Association Dues and Membership fees; Approximately $50 to $100 a month
- Multiple Listing Service (MLS) Access; Approximately $100 to $200 a month
- Auto Expenses
- Desk Fees or Office Fees; Approximately $0 to $300+ a month
In addition, you may find yourself spending money on marketing or purchasing real estate leads through programs like, Zillow, Opcity or Realtor.
These costs and figures can add up. Next thing you know, you have spent $5,000 and still haven’t made a paycheck.
It Takes Time To Earn
Being a real estate agent can be characterized as a life of large paychecks, long pay days. While the average commission check is a good amount, it can take a month to a year to earn that paycheck.
I always tell new agents to expect it to take 3 to 6 months to get their first client and another 3 to 6 months until that client results in a closed transaction.
That’s 6 to 12 months before you see your first paycheck. Sure, it can happen sooner. For agents with the right support systems and network, it does.
I tell people to be conservative so they don’t get their hopes crushed. This difference between effort and paycheck is a big reason people quit real estate.
It’s a lot of effort to show up and work for 6 months to a year and not get any money for it. At least at a corporate job, you work and get your paycheck weekly, bi-weekly and, in rare cases, monthly.
You need to eat today. Pay the gas bill this month.
The agents who make it past two years understand this cash flow direction. They either have a sizable nest egg to begin their careers or they minimize their expenses. This gives them the time needed for the first sale to come.
I became a real estate agent in August, 2017. My first client came in October and was a cash buyer. I closed in November. It took me 3 months to get my first paycheck. I was an anomaly. The agents in my cohort — those who started with me — didn’t see a paycheck until February and March. There experience was more the norm than mine was.
Should You Become A Real Estate Agent?
I hope that some of the information presented gave you a better understanding if a real estate career is right for you. It takes some time and work to properly research the various fields within real estate. It takes a lot of introspection, too.
Brokers and experts will boil a career in real estate down to your personality. Arguing that people are either a fit or they aren’t.
That’s 100 percent antithetical to what I believe. I believe there is a role in real estate that fits every personality and ambition.
It’s more about finding that role that is right FOR YOU. You may find that you’re not a good fit for being a general residential real estate agent, but could crush the commercial world. You could specialize in horse properties. You could find your niche in working with people in probate.
There is also something to consider when you’re thinking about a real estate career. That’s the level of support you’re seeking and your desire.
For example, a negative of a real estate career is the cost. It can be expensive. But, it doesn’t have to be. In some situations, like joining a team, many of the costs can be paid for by your team leader.
Let’s talk about whether you should join a team or go solo. Then, we can look at different brokerages.
Should You Join a Team or Go Solo?
First, let me start by saying, the decision you make today doesn’t have to be the final decision you live with.
There are a lot of people who join teams that end up going solo in their first year. People will also start off solo and eventually join a real estate team.
The benefits to joining a team are potential lead generation, accountability, and lower costs.
By joining a team, you will get leads, often for free, the day you start. You can shorten the time it takes for the average agent to get their first closing and a paycheck.
If you struggle with getting things done and need someone to hold you accountable, a team is a great option. Often the team lead will require you to make a certain number of follow ups on leads or other metrics that are there to help you succeed as a real estate agent.
Go Solo: The Cons of Joining A Real Estate Team
It’s feast or famine when going alone. You must generate all of your own leads and hold yourself accountable.
As they say, “higher risk, brings higher rewards”. That adage applies to your commission check. When you’re going solo, you will get a much higher split than when you join a team.
A common team commission split is 50/50 and then your half is then at the broker’s split of 70/30. On a team, that means you will get just 35 percent of every commission check.
Going solo, you will get 70 percent. To make the same money a solo agent makes, a team member would need to sell double the number of homes.
There is often an inverse relationship between the level of support provided — by a team or brokerage — and your commission check. The more support, the less you take home. The less support, the more you take home.
Joining any real estate team is not a guarantee of a better outcome than going solo. In fact, you have to join the right real estate team. The wrong real estate team can be just as problematic as going solo.
Poorly run real estate teams often operate on a shark-feeder model whereby they pass off only the undesirable leads to their team members.
The team leader will work with the most desirable clients and pass off the problematic customers and low-income opportunity customers to their teams. It also means a real estate agent starts to compete with the team leader.
Is Real Estate Still A Good Career With Covid?
The pandemic created a lot of problems and worries for a lot of people. It has brought economic uncertainty which makes people ask, is real estate still a good career with covid?
Valid question. The answer is yes. Despite the pandemic, the real estate market is still doing well. The overall real estate market is up over the last few years.
There is also fear of inflation. That we are entering into another real estate bubble. Read reports and you will find that we’re not in the same situation we were in 2008.
It’s possible the market will soften in the next few years, but few people expect a giant crash like homeowners experienced in 2008 to 2012.
If it does go down, that doesn’t make it a bad career. It makes it a different career. You may have to shift in your career. For example, you may have to learn about the foreclosure process and Real Estate Owned (REO) homes.
Every market has an opportunity to be successful. At times it can feel difficult, but it’s there.
Conclusion
Ready to get started in a career in real estate? Great, we encourage you to join the Exit Realty family.
