Many real estate agents that are either new in the field or are thinking of upgrading their expertise in the area are looking to commercial real estate. The reason is simple. The general conception about commercial real estate is that it will increase their earnings exponentially.
That conception is valid for the most part, meaning that if you work and you want to improve your profits, the chances are that you will, but you will need to work. So let’s see exactly what makes a commercial real estate agent have higher incomes and what those incomes are.
When you work as a real estate agent, you are generally expected to have some sales, negotiation, and communications skills. Many real estate agents can reach high salaries in their field, but they also need to upgrade their skills if they want to upgrade their business. For those wishing to become commercial real estate agents and reach six-figure salaries, there is a learning curve they have to embark on. Those salaries don’t come without expectations of increased education.
Higher salaries come with higher expectations, meaning more training and education. But all of this can even double their salary. The reason for this is the knowledge necessary for commercial real estate.
Usually, a commercial real estate agent starts as a residential real estate agent. In order to make the transition successfully, aside from the skills necessary from a residential agent, they need to specialize in sales, people management, business, and communication skills. Marketing and financial degrees are very valuable because, as a commercial real estate agent, the job will require you to understand concepts like underwriting, tax ramifications, lending practices, and the proficiency to communicate efficiently with the seller and buyer.
Real estate agents can attain these skills through different types of specializations, and each additional expertise mastered brings a salary increase. Because of that, we can see differences in salaries between every type of real estate agent.
While the average salary for a commercial real estate agent is $74,000 based on the Real Estate Income Guide from 2020-2021, this amount can vary. The amount of experience, expertise and time invested in the business can make a big difference.
Because of that, we can say that an agent that works less than 20 hours a week reports a median annual income of $21,600, while one that works 60 hours a week reaches median annual earnings of $163,200. However, the majority of commercial real estate agents work around 40 hours a week, based on a survey by the National Association of Realtors (NAR).
The other factor that influences a commercial real estate agent’s earning is their field of expertise. With no specialties, a real estate agent makes a median income of $27,000. However, specializing in affordable housing increases their earnings to $52,000, residential real estate is similar at $52,300, while specializing in the commercial properties niche attracts median earnings of $74,000. The highest paying specialty is luxury real estate, with a median income of $83,000, similar to foreign investments. For those environmentally aware real estate agents, it might be an added motivation to know that specializing in green or eco-friendly properties will bring them a median income of $75,000, slightly higher than commercial properties. But, don’t forget, time plays an important role here.