Plan on Getting Rich as a Real Estate Agent? Read This First

Many people think that becoming a real estate professional is a quick path to success, but that's generally not the case.

Jan 12, 2014 at 11:14AM

Being a real estate agent is often seen as a somewhat glamorous job, one that virtually anyone can do and potentially get rich from.

In fact, becoming a real estate agent (or Realtor, as the National Association of Realtors calls them) can be a simple matter of taking a two-week course and passing a licensing exam. In a sense, getting into the business is easy.

But being successful is tough!

Car

The stereotypical Realtor is one who drives around in a luxury car and projects an image of success in order to impress his or her clients enough so that they list or buy a house with them (the movie American Beauty does a great job of creating a stereotypical Realtor). However, this is not always the case. In fact, the proportion of "rich" or extremely successful Realtors is very small. Let's take a look at what most Realtors make, and then take a look at what separates the successful Realtors from the rest of the pack.

The reality of the real estate profession
In reality, the median income of a Realtor in 2012 was $43,500, which is well above the $34,900 figure from 2011. This really illustrates how much a Realtor's income can fluctuate -- and can plummet in a bad housing market. Only 2% of Realtors earn more than $250,000 per year, and even to get in the upper five-digit range is rare, especially in the early stages of a realtor's career.

Re

Image Credit: http://www.pallspera.com

According to U.S. News, realtors in the 75th percentile make $61,960, and those at the 25th percentile make just $27,200. This data is from 2011, so these figures are undoubtedly a little bit higher now, especially with the improvement in the housing market, but it is a good indicator of the range and uncertainty involved in the profession.

According to a survey of 1,758 real estate professionals conducted by ActiveRain, 22% of real estate agents earned less than $35,000 per year, and just 21% earned $100,000 or more. This is far from a "rich" profession. In fact, these income levels look pretty similar to professions that are thought of as lower-income, such as education and law enforcement.

Since it's pretty safe to assume that those considering the real estate profession are aspiring to be in the upper income brackets, let's see what they might be able to do to swing the odds in their favor.

The exceptions

Tech

We'll define the "exceptions" as those real estate agents who earn $100,000 or more, which is roughly the upper 20% of realtors. Agents who make six figures (or more) spend six times more on technology and ten times more on marketing efforts than their lower-income colleagues.

In other words, those who spend more money tend to make more money. The higher earners are also much more likely to actively blog about real estate in order to attract potential buyers and sellers, and they are are much more likely to use online video sites such as YouTube to broadcast videos of their listings and other real estate topics.

Also, the more successful Realtors tended to be the most experienced. Most of the successful real estate agents surveyed had 11 to 20 years of experience.

In a nutshell
Becoming a real estate professional probably won't make you rich overnight. While there are methods that seem to be effective, the best way to be successful in real estate is similar to that in most other businesses: Learn all you can, effectively use the latest technologies, and don't be afraid to spend money in order to make money.

While a career as a real estate professional can certainly pay the bills and earn you a good living, those aspiring Realtors with visions of driving clients to properties in their new Porsche may need a reality check.

Real Estate + Apple? This device makes it possible.
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its destined to change everything from banking to health care. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here

Matthew Frankel has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Netflix. The Motley Fool owns shares of Amazon.com and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers