Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and heres how we make money.
The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
Buying a property to rent out is one of the oldest ways of investing in real estate. But if you’ve ever had a landlord, you probably dont dream of being one: Fielding calls about oversize bugs and overflowing toilets doesn’t seem like the most glamorous job.
But done right, real estate investing can be lucrative, help diversify your existing investment portfolio and eventually provide a stream of passive income. And many of the best real estate investments don’t require showing up at a tenant’s every beck and call.
Understandably, many investors don’t know where or how to invest in real estate. Here are some of the best ways to make money in real estate, ranging from low maintenance to high.Advertisement
A career in real estate can be incredibly rewarding. You get to help people find their dream homes, invest in properties, and build wealth through strategic real estate moves.
But how exactly does someone get started in the real estate industry?
If you want to become a licensed real estate agent and start selling properties, follow this beginner’s guide. We’ll cover the typical steps and requirements for launching your real estate career.
Understand the Various Career Paths
Real estate is a broad field with diverse career options beyond just being an agent. Some other paths include
-
Real estate investor – Buys sells and manages investment properties. Requires capital and good financial analysis skills.
-
Appraiser – Evaluates properties to determine fair market value. Must get certified through extensive training.
-
Property manager – Oversees residential or commercial properties and tenants. People and business skills are key.
-
Mortgage broker – Helps clients find the right home loan products and lenders. Highly analytical role.
-
Developer – Oversees real estate development projects. Construction knowledge and financing experience needed.
-
Realtor – Helps clients buy, sell, and lease properties as their agent. Sales ability and interpersonal skills are vital.
Think about which role best suits your interests, talents, and goals in real estate. Many start as real estate agents and then expand into other areas later on.
Research Licensing Requirements
To legally conduct real estate transactions and earn commission, you need a real estate license. Each state has its own steps and criteria.
Some typical requirements for getting a license include:
- Being 18+ years old
- Having a high school diploma or equivalent
- Passing a background check
- Taking pre-licensing real estate courses
- Passing the state exam
- Paying licensing fees
Search “(your state) real estate license requirements” to learn your state’s specific rules. Then gather what you need to qualify.
Choose Between a Broker or Salesperson License
You also must decide between pursuing a salesperson or broker license:
-
Salesperson – Can provide real estate services under a broker’s supervision. Just need to pass the salesperson exam.
-
Broker – Can work independently without a supervising broker. Requires more education, experience hours, and passing the broker exam.
Most start by getting their salesperson license and work under a brokerage. Then they get their broker license down the road.
Compare the two paths to determine the better fit. If unsure, start as a salesperson to build experience.
Take the Required Real Estate Courses
Nearly every state requires completing pre-licensing real estate courses through an accredited program or school before you can get licensed.
Common required courses include:
- Real Estate Principles
- Real Estate Law
- Real Estate Practice
- Real Estate Finance
The curriculum covers essential topics like regulations, transactions, financing, taxes, and more. Courses range from 30-90+ hours and cost $200-$500 typically.
Study and Pass the Licensing Exam
After completing your pre-licensure education, you must pass the real estate salesperson or broker exam for your state.
The exam covers:
- Laws and regulations
- Brokerage relationships
- Contracts
- Financing
- Property valuation
- And more
Studying real estate exam prep books thoroughly is key. Many also recommend taking practice exams to improve your test-taking skills.
You’ll schedule a date to take the computer-based exam after applying with your state licensing board.
Apply for Your Real Estate License
Now it’s time to actually apply for your real estate license! This involves:
- Submitting your exam results
- Completing required application forms
- Providing documentation like transcripts
- Paying licensing fees
- Getting fingerprinted for a background check
- Any other state-specific requirements
The process takes 30-90+ days typically. Renewing your license after your initial term also requires an application.
Join a Real Estate Brokerage
As a new real estate agent, you’ll need to affiliate with a brokerage firm to have a supervising broker. Avoid going solo as a newbie.
When interviewing brokerages, consider:
- Training programs offered
- Split of commissions and fees
- Provided office resources, marketing support, technology
- Broker-to-agent ratio
Having a mentor broker invested in your success is ideal during this initial learning phase.
Build Your Sphere of Influence
Start networking right away to build a base of contacts who know you’re now in real estate.
Leverage social media, join local business groups, attend open houses, volunteer in your community, and tell friends.
Growing your sphere of influence gives you a pipeline of potential leads and referrals over time. Don’t wait to get started.
Develop Your Skills Ongoing
Get comfortable using all the technologies real estate agents rely on – CRMs, listing databases, eSignature tools, and more.
Also be prepared to continually expand your skills in areas like contract negotiation, real estate law, financing, and digital marketing.
Real estate is an ever-evolving field. Commit to lifelong learning so you can provide the best service to clients.
If you’re willing to put in the hard work upfront to get licensed and trained, a standout real estate career awaits you. Use this guide to start mapping out the steps that are right for you. Wishing you much success!
Use an online real estate investing platform
Real estate investment platforms connect developers to investors who want to finance projects through debt or equity. Investors hope to receive monthly or quarterly distributions in exchange for taking on significant risks and paying a fee to the platform. Like many real estate investments, these are speculative and illiquid — you can’t easily unload them the way you can trade a stock.
The rub is that you may need money to make money. Many of these platforms are open only to accredited investors, defined by the Securities and Exchange Commission as people whove earned income of more than $200,000 ($300,000 with a spouse) in each of the last two years or have a net worth of $1 million or more, not including a primary residence. Alternatives for those who cant meet that requirement include Fundrise and RealtyMogul.
» Ready to start investing? Best real estate crowdfunding platforms
Consider flipping investment properties
This is HGTV come to life: You invest in an underpriced home in need of a little love, renovate it as inexpensively as possible and then resell it for a profit. Called house flipping, the strategy is a wee bit harder than it looks on TV. Its also more expensive than it used to be, given the higher cost of building materials and mortgage interest rates. Many house flippers aim to pay for the homes in cash.
“There is a bigger element of risk, because so much of the math behind flipping requires a very accurate estimate of how much repairs are going to cost, which is not an easy thing to do,” says Meyer.
His suggestion: Find an experienced partner. “Maybe you have capital or time to contribute, but you find a contractor who is good at estimating expenses or managing the project,” he says.
The other risk of flipping is that the longer you hold the property, the less money you make because you may be paying a mortgage without bringing in any income. You can lower that risk by living in the house as you fix it up if the updates are cosmetic and you don’t mind a little dust.
» Which is better? Real estate vs. stocks
How to Start a Career in Real Estate? ( 3 Steps ) | Ryan Serhant
How do I become a successful real estate agent?
We’ll take a look at the steps to become a successful real estate agent and strategies to launch your real estate career. Get a real estate license. Find a real estate brokerage. Join the National Association of Realtors (NAR). Understand your income and budget. Make a business plan. Develop a marketing plan. Build your online presence.
How do I get a real estate license?
Go to your state real estate commission’s website to find information on licensing requirements and a list of accredited pre-licensing institutions. Pre-licensing courses can be taken in person or online, so consider your learning habits before deciding where to enroll. (Some people focus better in a classroom setting, Wayne points out.)
How do I become a real estate professional?
After passing your state’s licensing exam, the final step necessary to becoming a full-fledged real estate professional is to register your status with your home state. This process generally requires a form and a registration fee to be mailed or electronically submitted to your state’s real estate licensing board.
What does it take to become a real-deal real estate agent?
Let’s get into what it takes to become a real-deal real estate agent. Believe it or not, it can be accomplished in a matter of 4 (crucial) steps. First and foremost, if you’re considering becoming a real estate agent, you must review your state’s real estate licensing and education requirements.
