Are you interested in becoming a thriving real estate agent? If so, the first thing you must ask yourself is whether you want to work in commercial or residential real estate. Granted, because more people are likely to buy or lease a place to live versus a place to run a business, it is easier to get into residential real estate \u2014 where there will always be more potential clients and transactions.<\/p>\n\n\n\n
However, commercial real estate can also bring in a substantial number of clients by potentially offering investors steady returns and better cash flow than residential properties. It also brings in more money for agents. In fact, according to Glassdoor.com, commercial agents had an average salary of $90,914 nationwide, whereas the average salary for real estate agents<\/a> was $50,897<\/a> – this number being skewed towards residential real estate agents . So, if you want to earn more, you need to understand what it takes to become a commercial real estate agent, as well as the pros and cons of the business.<\/p>\n\n\n\n The first step to success in any field is to understand your product and know what you\u2019re selling. Commercial real estate<\/a> (CRE) refers to properties meant to generate income. These include places where companies conduct business, multifamily structures and hotels, among others. They\u2019re usually owned by investors who collect rent from each business\/tenant that operates on the property.<\/p>\n\n\n\n According to the Association of Real Estate License Law Officials (ARELLO), there are about 3 million real estate agents in the United States. Those who deal with CRE are specialized and are called commercial real estate agents as opposed to their counterparts, residential real estate agents, who specialize in residential properties. Specialization is necessary because CRE transactions are often more complex than residential transactions.<\/p>\n\n\n\n Furthermore, CRE agents often represent both buyers and sellers, as well as lessors and lessees<\/a>. And, in addition to receiving commissions, they are also sometimes salaried by their brokerage. The scope of work may also vary because there are diverse niches in the CRE industry. For instance, besides selling, buying and leasing, CRE agents may also be property managers, appraisers or real estate developers.<\/p>\n\n\n\n All real estate agents must obtain a license from the state in which they wish to practice in order to represent buyers and sellers, as well as lessors and lessees in property transactions. This is the same license regardless of whether you want to sell commercial or residential properties. To obtain the license, you must:<\/p>\n\n\n Meet the State\u2019s Eligibility Requirements<\/strong><\/p>\n Each state<\/a> has its own licensing requirements and regulatory offices. Common requirements include a minimum age, background check and a high school diploma. You should also check to see if your state has a\u00a0reciprocal licensing agreement<\/a>\u00a0with other states, which means that obtaining a license in one state could allow you to practice in another state, too.<\/p>\n Take approved prelicensure classes<\/strong><\/p>\n Required courses vary by state in terms of hours and content. For example, New York requires\u00a075 hours<\/a>\u00a0of courses, whereas Texas requires\u00a0180 hours<\/a>. The courses cover topics like real estate fundamentals and laws, along with national and state-specific topics. These courses have a difficulty level similar to a first-year college course and are usually priced between $150 and $500, depending on the state and format (such as live, online or independent study).<\/p>\n Pass the exam<\/strong><\/p>\n Exams are usually administered by the state and contain between 75 and 150 multiple choice questions. And, because pass rates are around\u00a050-60%<\/a>, pre-exam study guides or programs are recommended. States will post the results about a week later and issue the license a week after that.<\/p>\n\n\n Once licensed, it\u2019s important to find a brokerage specialized in commercial real estate to gain experience in the market in which you intend to practice. If you\u2019re interested in commercial, these are the two best options:<\/p>\n\n\n A Real Estate Brokerage That Works in Both Commercial & Residential Real Estate<\/strong><\/p>\n The potential for steadier income is in residential transactions, which are easier to obtain and faster to close whether your client is renting, buying or selling. Plus, as a new agent, you\u2019ll likely also find it more difficult to source commercial deals with little experience. So, in the meantime, you can learn from the commercial deals of other agents and build a client base of your own as you work toward becoming a commercial real estate agent.<\/p>\n The disadvantage here is that few brokerages have deals split evenly between commercial and residential. This can mean that you might have less exposure to commercial transactions than you would in a brokerage specific to commercial real estate.<\/p>\n A Real Estate Brokerage That Works Exclusively in Commercial Real Estate<\/strong><\/p>\n The advantage of a brokerage that is focused strictly on commercial real estate is that many usually have salaried training programs for new associates. These programs can last a year or more and, therefore, allow trainees to focus solely on CRE and not rely on residential deals for income while learning the ropes.<\/p>\n However, the disadvantage is that brokerages with training programs are also harder to get into because there\u2019s more competition. But paid trainees can expect to earn about $25,000 to $45,000 per year before making their first commercial transactions. Keep in mind, though, that some training programs are not salaried.<\/p>\n In addition to the two methods mentioned above, another way to jumpstart your career in CRE is by interning in a commercial brokerage before becoming licensed or by working in its marketing department.<\/p>\n\n\n Many commercial real estate firms require their agents to join a national or state-level professional association, like NAR<\/a>, ULI<\/a> or REBNY<\/a>. This is one of the most important tips to becoming a successful commercial real estate agent because these associations offer continuing education, networking opportunities, and supply and service discounts (such as manuals, software and more). You can also become a realtor by joining the aforementioned NAR, the largest trade association in the U.S. with more than 1 million residential and commercial real estate professionals. Realtors are agents who subscribe to NAR\u2019s code of ethics, and NAR membership will also add to your professional credibility.<\/p>\n\n\n\n With so many types of commercial properties, it is important to specialize. While residential agents may sell detached single family homes, condos and even co-ops<\/a> at the same time, for commercial agents, specializing helps narrow your focus and develop a deeper understanding about your niche. Specialization also helps you better target your intended clients and build your reputation in your chosen field. You can specialize in various types of properties<\/a> \u2014 such as office, retail, industrial and more \u2014 and further sub-specialize in specific uses, like laboratories, for example. <\/p>\n\n\n\n<\/span>What is a Commercial Real Estate Agent?<\/strong><\/span><\/h3>\n\n\n\n
<\/span>How to Become a Commercial Real Estate Agent<\/strong><\/span><\/h3>\n\n\n\n
<\/span>1. Obtain a Real Estate License<\/span><\/h4>\n\n\n\n
<\/span>2. Find a Real Estate Brokerage Firm with Commercial Deals<\/span><\/h4>\n\n\n\n
<\/span>3. Join a Professional Association and\/or Become a Realtor<\/span><\/h4>\n\n\n\n
<\/span>4. Specialize<\/span><\/h4>\n\n\n\n
<\/span>5. Create a Marketing Strategy <\/span><\/h4>\n\n\n\n