As with any business or career path you choose, you will encounter pros and cons related to the profession. It’s good to move forward with as much information as you can gather. Let’s consider the pros and cons of being a real estate broker.
Here are the Pros:
You get to be the boss – It’s probably most people’s dream to be the top dog, the person who gets to call the shots. Being a real estate broker gives you that advantage.
You determine when and how much time you want to work – This really is true about being a real estate broker. Flexibility is a major factor that draws people to real estate in the first place. As long as you have clear goals and can set boundaries, you can make this a reality.
You get to decide who you will or will not work with – You get to choose. While it’s true that in the beginning of your real estate sales career you will work with almost anyone to get a paycheck, as you build your client base you can be selective with who you want to work with as a client, as well as choosing the agents you will bring on board within your brokerage.
You create your ideal work environment – Have you ever found yourself working in a stuffy environment? Or one that’s just kind of drab and dull? Well, it won’t be the case if YOU are the broker. You want a modern look and feel workplace? It’s yours. Want to cater to the “good ‘ol down to earth” type? Go for it. Is high society luxury more your style? There’s room for that. You get to decide.
You get to pursue YOUR dreams – There’s no limits imposed by someone else when it comes to being your own broker. Take your brokerage in the direction you want to go. Reap the benefits of the work you put into it.
You have unlimited wealth potential – Notice we don’t say “income” potential. Wealth is really the goal here. Make your money and keep enough of it to reach the wealth status that you desire.
You aren’t bored – Every day in real estate is different from the one before. While good real estate brokers have structure to their days and weeks to keep them on a good performance track and maintain proper time management, the work itself is ever changing. Real estate is also a very interesting profession. Working with a variety of clients, looking at a variety of properties, and studying the market trends keeps your days fresh and seldom mundane.
You won’t feel like you are working because you are doing what you love to do – It’s been said that if you love what you do then you never work a day in your life. Imagine making a living doing your favorite hobby. That’s kind of what a career in real estate is like. It’s fun and exciting because you are deciding what your career looks like. And if you are deciding what your career looks like, then you’ve got to love it or you wouldn’t be making those choices. Choose to do what makes you happy.
You can work from anywhere in the world if you leverage your resources correctly – After you have been in the business for a while and have built up a good client base, as well as a network of resource partners, you can do a great deal of work remotely. Recently on a cable reality show there was a couple that was very successful in real estate looking for a luxury RV so they could take their work with them on the road. They ended up buying a $600,000 RV that had plenty of space to set up their office while traveling. Another example is that of a Texas broker who has a seminar teaching agents how to list homes without ever actually seeing the home. Think about it…paperwork is done offsite. Video conferencing makes it possible to meet with clients face to face yet not in the same room. There are companies that can take professional photos, install signs and lockboxes, and do pretty much anything else you need to get the job done. Just make sure that your resource partners are reliable and professional.
You can create an asset that can be sold later – You should always build your business with the end in mind. What is your exit strategy? Because the reality is, that one day you may want to leave the business behind and devote your time and energy to another endeavor. Whether it’s working with your favorite charity, spending time with the grandkids, or moving to a more desirable climate. Build a business worth selling.
Here are the Cons:
Your business can consume you – When you work for yourself you are likely to devote more time, energy, resources, and attention than you would to a J.O.B. It can take its toll on your health and relationships if you don’t set some good boundaries both for yourself and those who depend on you.
Potential financial failure – No matter how hard you work, sometimes things just don’t work out as planned. Some things are beyond your control. And setting up a real estate brokerage can be expensive. So, make sure you have a good business plan, favorable financing, and do your research before you begin.
Employee benefits are non-existent – If you come from a corporate background then you know that there are some great benefits. When you work for yourself you no longer have access to those benefits unless you create them yourself. You will be responsible for funding your own retirement plan, obtaining your health insurance, paying self-employment taxes, and so much more. Keep these things in mind as you move forward.
Inconsistent income – In real estate you get paid when you successfully close transactions. Some months you will have tremendous income and other months you may have zero. Proper planning will see you through the lean months. And a good budget properly adhered to will keep you out of financial trouble for the most part.
Legal exposure to lawsuits – Probably one of the most troublesome areas of owning your own business is the unexpected lawsuit. Whether it’s due to negligence or errors, you must take measures to protect your business and yourself. Have a good attorney on hand as well as a knowledgeable insurance agent to help shield yourself against legal issues that may arise.
The buck stops with you – When you are at the top of your organization, you will be taking the heat for things that go awry. If problems arise, you will be the person responsible for coming up with solutions. Resolving conflict among staff members will depend on your ability to work with difficult personalities so that your organization is protected from negative influences.
Managing and dealing with people – Whether it’s a difficult client, troublesome employees, or vendors that don’t follow through with commitments, you will be managing many different personality types and work styles. Be sure to show respect, listen carefully, and maintain composure when dealing with uncomfortable situations. Ultimately you are the final say, but how you deliver your message can make all the difference to a favorable or unfavorable outcome to the situation.
Outside forces beyond your control can affect your business – There are some events that can affect your real estate brokerage business and there’s nothing you can do to stop it. In these situations, it’s best to take a step back, consider the best way to respond, and then do what you can to work through it. So, what are some past events that would fit into this category? Consider the following:
- September 11, 2001
- Financial crisis of 2007/2008
- Hurricane Harvey and other Big Bad Boys and Girls
- COVID-19 in 2020
Some of these situations had to do with uncertainty and can cause your clients to decide to sit on the sidelines. Financial difficulty can really throw your business off. And in the case of hurricanes or other natural disasters, there may not be any real estate to sell. You can plan for a rainy day, manage your resources, and take precautions. But ultimately in the worst of scenarios you’ve got to stay calm and get creative with the hand that is dealt.
You have to wear multiple hats – In the startup phase as a real estate broker, you may have to be everything from the CEO to the janitor. No job will be too big or too small. Be flexible and go with the flow until you grow enough to hire resources to which you can delegate tasks.
You must be self-motivated – You are driving this ship and the success or failure will largely depend on your ability to get up every day and give the business your 100% effort. In sickness and in health, on good days and bad, it all depends on you because you are the real estate broker.
Interested in Getting a License?
If you would like to learn more about what it takes to get a Texas real estate license, then check out our informative video here: What It Takes To Get A Texas Real Estate License
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