As a landlord in the North San Diego County area, you probably see some California specific terminology in your real estate dealings. You might be wondering in particular what a BRE (or DRE) number is referring to. It's pretty straightforward. It's the number of a real estate license of some type granted by the state of California's Department of Real Estate (formerly the Bureau of Real Estate). We'll discuss what having a real estate license means, how one is acquired, and what makes having one advantageous for property managers in the state of California.
What Is the Department of Real Estate?
The California Department of Real Estate is the state agency responsible for many real estate related responsibilities. These include things like administering real estate license exams, issuing licenses and endorsements, and regulating and disciplining real estate licensees. The agency was established in 1917 and is widely considered to have created the first real estate law in the country. The department regulates real estate licenses and licensing practices and grants licenses to real estate brokers and salespeople. If you are investing in real estate in California, you'll encounter someone authorized by the agency at some point in your work.
What Does It Mean to Have a Real Estate License?
To perform real estate acts, you must be a licensed real estate salesperson who is also supervised by a licensed real estate broker. Both of these positions require a license issued by the Department of Real Estate. You may obtain a license even when you do not immediately intend to be employed by a broker, but without an employing broker, you may not perform acts requiring a real estate license.
When Is It Worth the Time and Money?
Many real estate investors wonder if it's worth the time and money to acquire a real estate license, but there can be many reasons to do so even when it isn't required. Having your own license can open some serious doors for you.
A license, for one thing, allows you access to Multiple Listing Service (MLS) listings. Access to such listings can give you an edge on spotting new properties coming to the market without relying on a real estate agent to do the leg work for you. A license of your own can also help you with networking by allowing you to work with brokers or agents, build your skills, and make relationships with a variety of other professionals.
Having a real estate license of your own means you can earn commissions when you buy or sell a property instead of paying for others to do the same service. Whether you work with another agent or buy or sell on your own, you're earning even more money from your investment than you would otherwise. You also have more say over the deals that you make, with full control of sales prices and payment terms.
When Is a Property Manager Required to Have a License?
California—and by extension North San Diego County—requires a real estate license to perform most acts related to real estate. This requirement puts property managers in the San Diego area in a tricky spot where they may only perform specific tasks involved with property management if they have a current California Real Estate license. A property manager needs to have a real estate license if they solicit tenants, negotiate leases, or collect rents. While on the surface, this seems to require property managers to have a real estate license for most tasks central to their job, there are some exceptions to the rule.
A property manager does not require a real estate license if they do not engage in either leasing activities or rent collection. The code governing licensing requirements does not apply to the resident manager of an apartment building or complex, or employees of that manager. If your property manager lives on site, they do not need a license to collect rents or engage in leasing. Finally, an employee supervised by a licensed property manager does not require a license to perform certain activities in connection with residential apartments. These activities generally involve things like accepting applications; showing units to prospective tenants; accepting deposits, fees, or rents; or providing information about a property.
What this really boils down to is that you should seek out a property manager who is licensed by the California Department of Real Estate. You'll find them useful, flexible and better able to meet your needs as a real estate investor than delving into the hassle of licensing yourself.
A Property Management Partner Is Your Next Best Investment
A good San Diego property management company can be an enormous asset to your investments. They'll handle a lot of the duties that come with keeping your properties running, and they can help you meet all sorts of unexpected challenges. Go the extra mile, and find a property manager who is licensed by the California DRE: you won't regret it! If you're not quite sure where to start, download our FREE guide on How to Choose the Best North County San Diego Property Management Company!
