Many people think working as a real estate agent is an easy profession where they can quickly make big money.
While there is a high earning potential for real estate agents, it may take a while to earn the big bucks, and it’ll take a lot of hard work.
The real estate field is relatively easy to enter. You’ll need a license (which varies by state), but it’s possible to earn one and start working within two months, according to Investopedia.
Like any profession and career, working in real estate has its pros and cons. But what draws so many people to the career field is the unlimited earning potential.
The average median income for realtors in was more than $42,000. Many realtors can earn much more, though, based on their experience and how many hours they work per week.
The biggest factors in high income
Two of the biggest factors in making big dollars in real estate are experience and hours worked per week.
Agents who are in the business for a long time, earn the most. Realtors with 16 years or more experience earn nearly $79,000 per year on average, according to RealEstateExpress.
As a real estate agent, you’ll be your own boss and run your own business, which means you get to decide how much you want to work. Putting in extra time and long hours makes the profession much more lucrative.
Agents who work less than 20 hours per week earn an average of about $31,000 per year. But agents who are willing to work 60 hours per week or more can earn average annual wages of more than $123,000, according to RealEstateExpress.
Obstacles that agents face
If you work hard over several years, a career in real estate can secure your financial future. However, it won’t be easy and there will be many obstacles you’ll face along the way.
Becoming a real estate agent requires upfront costs such as the money for licensing, training, and a marketing budget. Experts also say it could take up to six months to a year before you get your first commission check because those checks come at the end of transactions.
Because it may take so long to earn that first commission check, it’s necessary to have enough money saved to survive those early days when you’re getting started.
While the earnings potential is high, making money as a real estate agent is dependent on several factors, and it can be feast or famine early in your career. Because agents are paid through commissions, you could work hard for weeks or even months without earning any income at all.
Top reasons why agents fail
Making good money as a real estate agent can take a few years and many people fail during that time. However, there are several things you can do early in your real estate career to ensure success and secure a bright financial future.
Successful agents say one reason people fail in real estate careers is that they simply don’t work hard enough. Becoming a top agent will require you to work long and unusual hours, so be advised that a solid work ethic will go a long way.
Another reason many new agents fail is that they believe the common myth that all realtors make big money. In reality, the average realtor makes about $42,000 per year, as we noted earlier.
That’s why it’s important to pursue a real estate career for the right reasons. Many realtors enjoy the field because of the schedule flexibility, working with people, and the ability to help others make the biggest purchase of their life.
Working as a realtor isn’t for everyone, and it requires solid interpersonal and sales skills, a high tolerance for stressful situations, and networking and marketing skills.
Launching a career in real estateis also an investment. It’ll cost money to run your business and, if you want to sell real estate full time, you’d better have enough money in savings to help get you started.
Many agents fail because they don’t realize the cost of this initial investment. Real estate experts and veterans advise people to have at least six months of money saved for living expenses before they embark on a full-time real estate career.
Sticking to your plan
Starting as a real estate agent can be tough and it’s important to be realistic about the process. But if you stick to your plan and persevere, a career in real estate can eventually be very lucrative.
Agents reported earning an average of only $9,000 in their first year, according to RealEstateExpress. But the website’s recent study revealedthat earnings tend to increase quickly each year a realtor stays in the business.
The study showed that agents with between one and three years of experience saw their earnings jump to an average annual income of more than $38,000. And agents who were able to stick around for between four and 10 years earned an average annual income of nearly $64,000.
Bottom line: If you’re starting in real estate, the first year is always the hardest. But if you can make it through the tough times and keep putting in the work, you can move closer to securing your financial future.