A recent report by Alignable that tracks the state of America's economy showed that 45% of real estate agents who owned their firms had difficulty paying rent in November. It's no secret the real estate industry struggled for much of the year, but does that open the door for you to get into the industry?
Down markets that appear to have little upside often end up paying off for those who had the presence of mind to get in at the right time and a well-devised plan for success. It wouldn't be easy, but making good money never is. Benzinga looks at how and why you may be able to play this situation to your advantage.
Don't Miss:
- Investing in real estate just got a whole lot simpler. This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, and you only need $100.
- Passive income investments are one of the most trusted methods for riding out a recession, so it's no surprise that people are turning to these high-yield commercial real estate notes that pay a fixed 10% – 12%.
Choose Your Location and Industry Sector Very Carefully
When you hear the real estate industry is struggling, remember that the United States is massive, and the real estate industry has several sectors. Even when large portions of the market or industry are struggling, there will always be sectors and markets that are hot. Bigger markets like Los Angeles and San Francisco are indeed experiencing difficulties, but the country is bigger than that.
Look at Zillow's top 10 real estate markets for 2024. You may be surprised by what you see. Buffalo, New York, is at the top of the list, followed by Cincinnati and Columbus, Ohio. You'll also see a lot of other Midwestern and Southern cities that you may not have expected. Do you live in any of those areas? They're at the top of the list because they have lots of affordable housing, which more than anything, is what Americans want these days.
There may be a shortage of agents in relation to how many people are looking to buy and sell in these markets. That would make now an opportune time for you to consider how to get into the business and profit from the surge in these markets. Consider also that real estate licenses are issued at the state level, which means you could do deals in markets outside the one where you live or work your license.
Sectors To Avoid
America's commercial real estate sector is experiencing significant challenges. In years past, renting office space or representing commercial buildings was lucrative for high-performing agents and it will be again. However, right now, office space vacancies are at record highs, and that trend is expected to continue at least through 2024. So, the commercial sector may not be the one to jump into, regardless of your location.
It Will Take Time, Money And Careful Planning
Being a real estate agent or broker is usually a job where you work as an independent contractor, and most brokerages employ their agents on straight commission. That means you don't get paid unless you close deals. Because of this, becoming a full-time real estate agent is usually something people transition to over time.
Unless you have residual income, you will likely need to work a second job until you can stand on your own as a full-time agent. It's also important to consider that you will have expenses such as liability insurance and membership in your local Realtor's association, both of which are in addition to the real estate license.
Talk to agents in your area or brokers at firms you may want to work for to get an estimate for these costs. You will also need to give yourself adequate time to study for and pass a real estate license exam. Depending on your state's requirements, the schooling and licensing process could take several months.
If You Make It, You Can Make It Big
Make no mistake about it, real estate can be a difficult profession. But as is the case with all things, the degree of risk rises with the potential upside. Successful real estate agents can make huge sums of money in a relatively short time. They also get an inside view of the world of real estate investing and how to parlay their earnings into their mini-real estate empire.
That has always been the allure of the real estate game. It's high risk and high stakes. If that kind of opportunity gets your juices flowing, you might find that 2024 is the perfect time to transition to a career in real estate.
Read Next:
- Elon Musk has reportedly bought 6,000 acres of land just outside of Austin. Here’s how to invest in the city’s growth before he floods it with new tech workers.
- Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Here are 3 high-yield investments to add significant income to your portfolio.
- Collecting passive income from real estate just got a whole lot simpler. A new real estate fund backed by Jeff Bezos gives you instant access to a diversified portfolio of rental properties, and you only need $100 to get started.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
