Real estate agents and brokers can make a lot of money, but it can also take quite some time to become successful. Many people get their real estate license but end up quitting the business because they do not make enough money in the beginning to survive. How long does it take to become successful in real estate? It could take a couple of months, or it could take a year depending on the person, the market, their niche, and how much time they dedicate to the business.
Why does it take a while to make money as a real estate agent?
I have been a real estate agent and broker for more than 17 years. I have seen many agents get a great start to their careers, and many struggle. One of the biggest challenges to being a real estate agent is the way agents are paid. Most agents only get paid when they sell a house to a buyer or for a seller. The house buying or selling process can take as little as a week, but in most cases, it takes at least a month. When real estate agents first begin their career, they most likely will not have clients lined up to buy or sell, so they must find those clients as well.
How much money can real estate agents make once they are established?
It can take months to make money on your first deal, but successful agents can make a lot of money. It is not uncommon for real estate agents to make well more than $100,000 per year after commission splits. Before I started Blue Steel Real Estate, my previous office had three agents who had made over $300,000 in one year. Not every agent will make a ton of money in this business. I like to use the 90/10 rule to explain how the money is made by agents: 10% of the agents will make 90% of the money.
Most real estate agents will not make very much money for a number of reasons:
- Many agents work part-time
- Many agents have no idea what they are doing
- Many people become agents because they could not cut it at a regular job
- Many people have no plan before they become an agent
- Many agents get no training once they get their license
Making money in real estate is not easy. If you have the drive, the time, the dedication, and are willing to learn the business, you can be successful. If you are looking for an easy way to make a bunch of money, you will be disappointed.
How long will it take to make money as a real estate agent?
One common rule in the industry is that new agents should have 6 months of living expenses saved up before they become a real estate agent. It can take time to sell your first house, and it can take even longer to create a steady stream of sales. I have seen some agents do amazingly their first few months in the business, but it is rare. I think it is a great idea to have at least 6 months of living expenses saved up before you start. I have seen very promising agents quit the business because they ran out of money before they could gain any traction.
Just having enough money to survive should not be a real estate agent’s goal either. You should want to be making enough money to survive, save, invest, and do the things you love. How much money that takes depends on the person and their needs or goals. It can take a year or two before a new agent is bringing in a steady income. On year three or more, the good agents should begin to see all the hard work pay off, and the good money starts to come in.
How can an agent supplement their income while they get started in the business?
A lot of people are not able to save 6 months of living expenses. What can those people do to start a career in real estate without having to quit right when things start to happen?
- Some people want to be part-time agents and work two jobs. It is really tough to make it work as a part-time agent because clients need help all the time. If you have a flexible schedule, it may work, but otherwise, it is really tough. Can Part-Time Real Estate Agents Succeed at Selling Houses?
- Joining a team can be one way to earn extra income while you learn the business. My team has hired agents to do hourly work as well as sell houses.
- Find another flexible part-time job. One of my agents was also an Uber driver. They could work whenever they needed, and if they had to show a house, they could stop working whenever they needed.
For more information on becoming an agent, selling houses, setting goals, and more, check out: How to Make it Big as a Real Estate Agent: The right systems and approaches to cut years off your learning curve and become successful in real estate.
Real estate agents can make a lot of money, have very flexible schedules, and can be their own boss. However, it is not easy to get started, and it can take a long time to actually make money in the business. The more you plan, the more you save, and the more training you get the better. Please do not join an office that offers no training yet a higher commission split. Selling houses is hard, and you need help to get started.