If you’re searching for a side hustle that’s flexible, quick to start, and allows you to earn significant extra cash, look no further than becoming a part-time real estate agent. Because of its low barrier to entry (typically three to six months of training) and high earning potential, this alternate career path is becoming a popular choice for ambitious earners with extra time on their hands.
However, becoming a part-time real estate agent isn’t a walk in the park, and requires significant time and effort to see real results. Here’s what you need to know if you’re considering this career path.
Can You Be a Part-Time Real Estate Agent? Requirements to Fulfill
Yes, you can be a part-time real estate agent. The process of becoming a part-time agent is almost exactly the same as for people training to become a full-time agent. The only difference is that some brokerages typically won’t hire people who work part-time. Below are the basic steps for becoming a licensed real estate agent, part-time or full-time.
Overview: How to Become a Real Estate Agent
The first thing to understand about obtaining your license is that each state has different requirements. Because of this, it will be important to do your own research about your state’s specific rules. You can usually find this out with a quick Google search. All in all, it will likely take you about six months to become an agent and cost around $2,000.
Step 1: Take Pre-Licensing Courses - In any state, the first step is to enroll in real estate agent classes. Many cities will provide in-person classes at local business schools or community colleges, and there are also a plethora of online-only courses available. Given the dangers of the pandemic in many states today, you may prefer to take online classes even if in-person classes are available. Some of the most popular include:
Depending on your state, you may be required to take anywhere from 45 - 120 hours of pre-licensing classes. Some states also require that you pass a pre-licensing exam.
Step 2: Join a Brokerage - A real estate brokerage is a state-sanctioned organization that employs and oversees real estate agents to make sure all dealings are conducted legally. As an agent, you will be required to work under a broker. Some states require you to actually apply for and join a brokerage before taking your state license exam. This can be advantageous because you’ll already have an industry connection once you are a licensed agent, so can likely start working right away.
Step 3: Pass Your Real Estate Licensing Exam - The next step on your journey is to register for the state exam and pass to receive your license. Many real estate schools will provide you with practice exams that are very useful in preparing you for the actual test. Again, each state conducts its exams differently and through different providers, so research your specific state board for more detailed registration instructions. Most states will allow you to retake the exam two to three times if you don’t pass on your first try before requiring additional class hours.
Step 4: Register with Your Local Real Estate Board - Once you’ve received your license, you’ll need to sign up and pay a registration fee to join your state’s real estate board. A quick online search for your specific state should show you how to register.
Step 5: Become a Registered Realtor (if You Choose) - Though the terms “realtor” and “real estate agent” are often used interchangeably, “realtor” is actually a copyrighted term owned by the National Association of Realtors (NAR). In order to market yourself as a certified realtor, you’ll need to pay yearly dues and join the NAR. There are other benefits as well, including access to continuing education courses and proprietary market research. It will be up to you to decide if the extra cost is worth it.
Pros and Cons of Being a Part-Time Agent
Now that you understand the basic steps for becoming a part-time agent, we’ll cover the benefits and drawbacks of choosing this career as a side hustle.
As we mentioned at the beginning of this article, there are many plus sides to taking on real estate as a side hustle. Some of the factors that most often draw people to this field include:
- Extra Income - The whole point of a second job is to make extra income on the side, and working as a real estate agent certainly offers this opportunity. Though we will discuss salary in more detail later on, the average part-time agent makes around $1,100 per week according to ZipRecruiter.
- Flexible Schedule - Another huge benefit to the real estate profession is that, depending on your arrangement with your broker, you get to decide your schedule. Since you’re setting up open houses and meetings with clients, you can decide if there are certain days and times that don’t work for you, and these don’t have to stay the same week to week.
- Expand Your Connections - For those with an interest in entrepreneurship, becoming a part-time real estate agent is the perfect opportunity to expand your sphere of influence. As an agent, you’ll be constantly networking and meeting new people, allowing you to forge valuable connections in the community.
- Time-Intensive - Like most jobs, you’ll get out of this one what you put into it. The more time you spend forging connections and making sales, the more money you’ll make. It can be difficult to balance your clients’ needs and schedules around a full-time, 9-5 work schedule.
- Brokerages May be Limited - As we mentioned earlier, not all brokerages will be willing to hire part-timers. Training up a newbie is time-intensive, and all the more so if that newbie is only available for limited hours each week. That being said, you can certainly find brokerages that welcome part-time agents, but it will make your search more difficult.
- Strong Competition - In 2019, there was a record high of 1.39 million real estate agents in the U.S. When you’re competing against full-time workers in a crowded market, things are going to be more difficult for you as a part-timer. It may be awhile before you start to build up enough connections to see your work come to fruition.
Can You Be a Part-Time Real Estate Agent With a Full-Time Job?
Yes, you absolutely can be a part-time real estate agent with a full-time job, as long as you employ excellent time management skills and don’t mind being busy. The most popular open house times are evenings and weekends because most people looking to buy or rent a new home likely also work a 9-5 schedule. This is good news for part-time agents, as the meeting times that work best for your clients will also work best for you most of the time.
However, being a real estate agent requires a lot more than just hosting open houses. Prospecting and lead generation are a huge part of the process; this is not a passive income stream. Between prospecting, open houses, and your full-time job (not to mention other family and friends commitments) you probably won’t have much free time if you embark on this career path.
Some people enjoy being busy and flourish in this lifestyle, but to make sure you’re ready, ask yourself the following questions:
- While working 40+ hours/week, will I have the time and mental energy to succeed in my pre-licensing classes?
- Will I have two to three hours to devote to open house showings every week? Will I have time to prepare for these events on the weekends?
- Will I have the emotional bandwidth to constantly communicate with clients, potential clients, and prospects?
If you answered “yes” to all of the above, then read on to learn about what you’ve been waiting for: the part-time agent salary.
Part-Time Real Estate Agent Salary
Calculating how much you can make as a part-time real estate agent is actually pretty easy. As we discussed earlier, the average weekly salary for a part-time agent is $1,100 and this can vary depending on the number of hours you work, the market you’re in, and how you usually make sales (commission vs referrals). The average national hourly rate for a real estate agent is $40/hour.
Commission is a fee your client pays you for your services in finding them a home and negotiating the agreement with the seller or landlord. According to RedFin, the average commission a real estate agent makes is 2.5 - 3 percent of the total home cost.
For example, let’s say your client purchased a home for $350,000 and you agreed on a three percent commission rate. The calculation would look like:X (earnings) / 350000 (total home cost) = 3 (commission percentage ) / 100You would then cross multiply 350,000 x 3 to get 1,050,000, then divide by 100 to get your earnings of $10,500. Using this method, you’ll be able to calculate how much you stand to earn with each client.
Another common earning strategy used by part-time real estate agents is referral fees. This is when you refer an interested client to another agent, either because you don’t have the time yourself to devote to their home search or because another agent would be a better fit for their needs. In this case, it’s standard for the referring agent (you) to receive 25% of the total commission earned by the other agent as a courtesy for referring a hot lead.
Continuing the example above, let’s say you referred that client to another agent who then earned the $10,500 commission. To calculate 25% of that amount, you would use the same basic equation:X (earnings) / 10,500 (total commission) = 25 (referral commission) / 100You’d then cross multiply 10,500 x 25 to get 262,500 and then divide by 100 to get your referral fee of $2,625.
Additional Resources for Starting as a Part-Time Agent
If you’ve decided that becoming a part-time real estate agent is the side career for you, take a look at our additional resources below to learn more about what it takes to get started, connect with new prospects, and put your brand out there:
- Coming up with your slogan + worksheet
- Open house sign in sheet templates for paper and digital
- Making the most out of your online ads
- Beginner strategies for new agents
- Real estate prospecting ideas for new agents
- Real estate prospecting postcard template
Once you get started on your real estate side hustle and the potential renters start rolling in, RentSpree is here to provide online, seamless tenant screening and rental application services. Contact us to learn more or set up a demo to see how these tools could make your job easier.