Education finance home ownership investor

Real Estate: Agent vs Investor

After buying my first house, I was so excited about all things real estate. I attended an expensive seminar, I read all types of articles, and I actually considered becoming a real estate agent. I went to a class to prepare me for the Michigan real estate licensing exam, and I found it fascinating. After stepping back to think about my goals though, I discovered that what I really wanted was to be a real estate investor. After looking into the two careers, the differences were clear.

Real Estate Agent

  • Salesperson
  • Works for a brokerage
  • Gets small commission from the sale of a home
  • Agent markets him or herself to get their name and face out there

Real Estate Investor

  • Seeks to own property
  • Might employ real estate agent to buy/sell property
  • Makes lump sum from sale of property, or constant cash flow from leasing a property
  • Uses property owned as leverage to get more capital for more deals

A real estate investor clearly has an opportunity to make much more money that an agent, so I see that being an investor is a better fit for my goals. Some real estate investors go and get a license to be an agent. This saves them from having to hire one. Personally, I’d rather just hire an agent to do all the paperwork and put my focus on the investing side.

There seems to be thousands of real estate investing experts offering you their guaranteed system of making money with real estate. At the end of the day, making money in real estate usually boils down to this: buy a property, fix it up (if needed), sell the property for a profit, lease it for monthly cash flow, or hold it for long term growth. The trick is knowing how much to invest, leaving leeway for unexpected expenses, and having patience to see the process through.

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