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Teach Graduating Teens to Be Real Estate Agent

Teach Graduating Teens to Be Real Estate Agent


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About This Lesson

If your teen wants to get a job right after high school, a real estate investor is a great path to choose. However, they should know about the law that dictates the field where they’ll be placing their money and future career on. So here are 5 important things to teach your teen about real estate law and property and casualty license agents.

Residential Rights

For starters, if you own rental property, then you should know that your tenants have certain rights that might not be obvious at first. Of course, these rights can change depending on the location. So it’s imperative that you check your local state laws, city laws, and county laws in addition to understanding what is common practice at the federal level.

One key area to know about is that in some areas, your tenants can remain in the unit even if they are not paying rent. This can sometimes be abused by tenants that know that. Thus, your future real estate teen-in-training should incorporate a certain amount of predicted risk into their financial modeling to account for tenants that do this.

Commercial Leases

Your teen should also know that residential and commercial real estate are two different ends of the real estate spectrum. Whereas residential units are made of individuals renting them, a commercial real estate agreement involves a company. For this reason, they are often afforded different legal protections or liabilities.

For instance, if someone rents an office unit from you via their C corp or LLC, then they can have a legal veil of protection if you try to sue them over damages. This can tie up your money in court for a while. It is important for a real estate agent to have strong legal language in their leases to make them liable for court fees in the event of litigation, no matter how small the chance. It is always better to be safe than sorry in these situations.

Imminent Domain

So you have either bought a property outright or become an investor that shares ownership in a piece of property. You might think that you have full legal rights to do whatever you want with this property. However, in addition to zoning laws, there are certain things the government can both do at will or prevent you from doing if they choose. 

If you read the fine print, you will find that every piece of property is ultimately owned by the government. This means that under eminent domain, they can choose to build a highway or other public space through your property, even if they pay you for it. So never assume that your property is 100% immune to outside conditions, especially from the government who has the ultimate authority after the bank on your piece of investment property.

Leverage and Callbacks

Speaking of banks, a real estate agent will likely have some sort of loan in order to acquire property from a larger financial institution. In return, they give the agent the rights to use the property. Sometimes, an agent will need to put up large amounts of capital and collateral. This is in case you stop paying, so they can get their money back. But in addition to this, they can choose to 'call' the loan back at any time, whether this is thousands or millions.

Tax Incentives

Agents should always report their earnings from a real estate IRA or any other investment. Even though they can offer nice tax breaks, they are still considered income. But advise your teen to speak with a professional about structuring their reporting to be more beneficial come tax season.


When it comes to real estate, it is a huge industry. However, it can get even more complicated when you look at the laws surrounding real estate and the financial aspect of it. So make sure your teen doesn’t just jump into your next real estate deal or investment without knowing their rights, challenges, and opportunities. Instead, teach them to become a student of the industry. Have your teen start by understanding these 5 key legal concepts above to have peace of mind in their decision making as they pursue the career of a real estate agent. 



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