Whether you’re searching for your next investment property or trying to figure out the best way to market your current rental, it’s essential to partner with an investor friendly realtor. These agents understand ROI jargon and can analyze markets and properties for profitability.
They can also help you find off-market deals by leveraging their local contacts and networks.
Finding Profitable Investment Properties
Investor-friendly real estate agents are familiar with local rental regulations, and can help investors find short term or long term rental property opportunities. They can also introduce investors to professionals who specialize in 1031 exchanges.
A good way to test an agent’s investment-friendly qualities is to visit open houses they host. Observe how well they interact with potential tenants and how quickly they answer questions.
Another option is to ask for referrals from other real estate investors in your area. Many investors in forums like Bigger Pockets will recommend an agent, and you can use this information to narrow down your search.
A good investor-friendly realtor will understand your ROI goals and be familiar with basic investment equations. They should know how to calculate cap rates, vacancy rates, and cash flow. Additionally, they should be able to locate off-market properties that have not been listed on the MLS. This will give you an edge in negotiating your deal.
Finding the Right Property
A real estate investor-friendly realtor is one who understands rental property investing, including standard industry terms like cap rate, gross rent multiplier (GRM), net operating income (NOI), and internal rate of return (IRR). You can find these agents by asking for referrals at networking events or other business contacts. A real estate investment agent who also invests in properties can also provide you with valuable insights into the best investment opportunities.
In addition, these agents are familiar with local laws that pertain to rental property investments and will know how to best advise you on a potential purchase. They can introduce you to 1031 exchange professionals and help you defer capital gains taxes on the sale of an existing property. They will also be on top of the market, alerting you to on and off-market property opportunities that are profitable for investors. They may even know of some hidden gems that are not on the MLS.
Negotiating the Deal
Most real estate agents can help their clients find a primary residence, but investor-friendly agents go beyond that. They spend time learning about investment properties and may even own and manage a portfolio of their own investments. That means they can help you avoid the pitfalls that can sink an investment.
For example, Steinemann notes that an agent who owns a property themselves will understand what it takes to get top dollar for your investment property. They’ll also know which upgrades will boost your ROI. For example, he says that in Baton Rouge, granite countertops might increase the value of a single-family home south of Florida Blvd. but won’t add much to the resale value of a multifamily property north of it.
Other subjective traits to look for in an investor-friendly realtor include punctuality, a strong network of other investors, and experience with analyzing property deals. You can usually find this real estate agent by asking around your real estate investing community.
Managing the Property
Real estate investors care about the financials of a property, including the ROI, after-repair value and tax implications. Investor friendly agents understand this and can assist in identifying properties that will maximize profits.
In addition, they often have access to off-market properties that are not listed on the MLS. As a result, they can help their clients find investment properties before other buyers get in on them.
Many investor-friendly agents also invest in real estate themselves. This can give them first-hand experience and a level of trust that other investors lack. In addition, they will have an intimate understanding of the local market and what it means for investing.
Lastly, investor-friendly agents tend to be full-time realtors and not moonlighters. This ensures they have time to devote to locating and closing on investment properties. It also allows them to stay on top of the market and be aware of when property owners are ready to sell.