About the Author

Author: Justin Nabity

Last updated: January 21, 2025

Real Estate

Should Doctors Get a Real Estate Agent License?

The value of getting a real estate license as a physician depends on your goal. Some find it a great source of passive income for doctors, while others want to transition to real estate after a medical career.

If you plan to use a real estate license for extra income, a career shift, or a backup plan, it’s worth acquiring one. If you’re unsure, we’ll help you explore the pros and cons of pursuing a real estate agent license for doctors.

Key Takeaways

  • A real estate license offers credibility, MLS access, and commission earning potential.
  • Physicians can save on taxes through the Real Estate Professional Tax Status.
  • Licensing requires time, effort, and fees, varying by state requirements.
  • Evaluate alignment with financial goals before committing to licensing or career shifts.

The Advantages of Getting a Real Estate License for Doctors

Whether you plan to fully transition to real estate after medicine or make it a side hustle, there are perks to becoming a licensed real estate salesperson.

Gaining Credibility

The law requires a real estate broker, agent, or realtor to obtain a license. If you plan to work in real estate, obtaining a license will allow you to operate as an agent, get clients, and make transactions.

Gaining a real estate license also reflects your professional credibility, showing you have the necessary knowledge and skills to negotiate and close real estate sales.

Note that agents, brokers, and realtors are different and require you to obtain a license separately. Depending on your goal, getting a license for each title will let you establish your credibility in the field and expand your connections.

Access to the Multiple Listing Service

The Multiple Listing Service (MLS) is a portal enabling a licensed real estate agent, broker, or realtor to search, view, and share properties for sale in a certain region.

Buyers and sellers can access the site, but certain information will be confidential. They must partner with an agent to check the complete details of the listing.

If you plan to buy a house or commercial space for your private practice, the database is a good resource for scouting residences or properties in your chosen area.

Meanwhile, if you’re considering private real estate investment, you may also use the portal to check on properties with profitable investment deals.

Earning and Saving on Commission

Agents earn via commissions, and you can’t accept compensation or commission without a real estate license.

Besides going into real estate full-time or part-time, you may connect buyers or sellers to agents and earn commission through referrals.

Your cut may be smaller, as you may not be actively involved in the selling process, but it’s a good way to gain passive income if you have a busy schedule.

You can also use your license for personal deals and save on agent commissions.

Tax Reduction

Becoming a licensed real estate agent helps reduce your taxes, thanks to the Real Estate Professional Tax Status.

This IRS-recognized designation qualifies benefits for individuals in the real estate industry, including tax liability reduction, long-term capital gains, and the ability to designate passive income as active income.

If you have rental properties, you can claim tax deductions for repair or maintenance expenses, expenses for necessary supplies, insurance, losses, and depreciation.

However, you must meet these qualifications to be eligible for this tax benefit:

  • More than half of your services during the tax year were done in real property trades.
  • You performed and participated in over 750 hours of services in real property trades during the tax year.

The Challenges of Getting a Real Estate License

Consider the following downsides or challenges during and after getting a real estate license.

Investing Time to Get a License

Gaining a license takes time and effort. Most real estate professional requirements require the following:

  • High school diploma
  • 18 years of age
  • A complete license application form
  • Required hours of qualifying education
  • Passing the Real Estate Salesperson license examination
  • Required ID card

Note that requirements and the application process differ by state. For example, New York requires 77 hours of pre-license courses, while Texas demands 180 hours.

You may also encounter additional requirements, such as New York requiring applicants to be sponsored by a licensed Real Estate Broker. Check your state’s requirements for the full process and requirements.

If you want to further your career in real estate by becoming a licensed broker, you must dedicate another period to acquire a broker license. Unlike an agent license, a broker license demands experience and additional qualifying education.

Getting a license is difficult, especially if you’re doing it with your medical career. Consider the time and commitment you need to dedicate when getting one.

Paying Fees

Pre-license education and application for the Real Estate Salesperson license all require a fee. The cost depends on the state, but Study.comestimates a total average of $1,565 needed to get a real estate license.

These fees include fingerprinting, background checks, pre-license education, real estate licensing exam fees, application fees, and original license fees, among other expenses.

Note that costs don’t end after receiving a license. You will continue to pay for real estate broker fees, National Association of Realtors membership dues (if you’re a member), and continuing education.

Plan Your Future with Physicians Thrive

Becoming a licensed real estate agent lets you tap into a profitable extra income or career after medicine. However, it’s only worth doing if it aligns with your financial goals.

As you decide whether to enter real estate, consider learning more about the industry, asking other medical professionals with real estate licenses about their experience, and seeking professional advice from financial experts.

If you need financial guidance, Physicians Thrive offers expert advice catered to doctors and medical professionals.

Collaborate with our Financial Experts if you need help transitioning from medicine to real estate, managing your finances, preparing for retirement, or other concerns.

Leave a Comment