An ideal real estate agent for investors will understand the local market in your target neighborhood and have local landlords as contacts.
They must understand financial metrics such as cash flow, gross operating income, return on investment (ROI), cap rate and investor tax breaks.
They Know the Market
Real estate investing can be complex, with numerous considerations that need to be taken into account when making investment decisions. An agent that caters specifically to investors should understand local markets well enough that they can find properties that help you meet your investment goals; tax implications, mortgage options and return calculations all need to be factored into their calculations as well. They don’t necessarily need to be investors themselves – although many do – but have experience within the real estate industry; plus enough drive and focus to take on any deals necessary.
An investor-friendly real estate agent should have the resources available to them in terms of contractors, lenders, insurance agents and title companies who can meet your needs as an investor. You should be able to utilise their network in order to make short or long term rental properties more lucrative investments.
Find an Investor Friendly Real Estate Agent Through Recommendations by Network
Your agent selection depends on your investment strategy – buy and hold, wholesaling or both. Consider who’s available when searching for deals; full-time agents tend to focus on finding investment deals more effectively and will be quicker at responding to calls, emails and texts than part-time agents; they can also keep up with trends in home sale/rental markets before other investors do and identify properties before other investors find them first.
An investor-friendly real estate agent should be intimately familiar with your local investment market and the micro markets you’re searching in, including micro markets where micro properties may exist. They’ll know where properties that have yet to be listed can be found and can negotiate sales agreements directly with owners who want to sell their homes or businesses.
They Can Bring You Homes or Properties That Are Not Yet Listed
Investor-friendly real estate agents understand how to find properties that aren’t currently for sale – such as renovation projects or foreclosure properties – giving their clients the best chance at finding an investment property at a bargain price and reaping maximum returns from their investment. In addition, these real estate professionals understand financing options specifically tailored for investors that may not be available otherwise.
Investor-friendly real estate agents must also be investors themselves. This enables them to have firsthand knowledge about all the issues facing property investors – cash flow, ROI and gross rent multipliers (GRM). Such understanding is invaluable when negotiating an investment property price or finding one with financial merit.
Many real estate investors rely on an experienced agent to assist with finding and managing rental properties, helping to prevent common errors while giving them more time to focus on other ventures. An agent also can explain various tax code provisions such as deductions, depreciation, capital gains taxation and 1031 exchanges to investors.
Another way for investors to locate an ideal agent is through networking events or simply coffee catching, asking other investors about their experiences working with specific agents and if they are full-time real estate agents as opposed to doing it as side business.
Full-time agents tend to act quickly when it comes to negotiating deals and can devote more time to searching out opportunities and researching markets than part-time agents who must also juggle other responsibilities.
An investor-friendly agent must demonstrate a track record in helping investors buy and sell investment properties, with testimonials available uncut on their website and a list of investments sold or managed in recent times, which they should gladly supply upon request.
They Can Help With Taxes
Tax considerations when investing in real estate should always be top of mind, so an investor-friendly agent should be knowledgeable of these matters and can explain them to you. They may even know about tax breaks available specifically to rental property investors and be able to recommend accounting professionals or firms that understand these needs.
Experience and knowledge are ultimately the cornerstones of investor friendliness when selecting a real estate agent, and this should include their understanding of both benefits and risks related to real estate investment, how to analyze markets and properties, launching and maintaining short-term or long-term rental businesses successfully, financing solutions, insurance needs, furnishing needs and managing an income property effectively.
Asked for referrals by friends or fellow investors in your area is one of the best ways to identify an investor friendly real estate agent. Attending open houses also allows potential agents to meet you face-to-face without being pressured into anything unsuitable by other investors and potential customers alike.
As part of your investment property search process, it is wise to set parameters that define which properties interest you. For instance, consider properties priced under $150K that generate median rental income in their market and with GRMs (Gross Rent Multiples) under 8.0 to avoid overpaying for an investment property. Furthermore, an investor-friendly agent must be familiar with local zoning regulations and building codes as well as micro markets in your locality.
They Have Experience
Real estate agents that are investor-friendly understand what an investor requires of them and can quickly spot details that can compromise a project if left overlooked. Furthermore, these real estate agents know which contractors, title agents, private lenders, attorneys, property management companies and other business partners to partner with in your market to ensure your project runs smoothly from start to finish.
These agents specialize in finding properties that will offer financial returns – either rental income or by flipping the home for sale. They know how to calculate ROI for both rentals and flips using fair market rent, operating expenses, capitalization rate and other variables that affect investment strategies and expectations of return.
An effective way to find an investor-friendly agent is by asking for referrals from other investors in your area, but this should not replace conducting your own due diligence. When interviewing potential agents, ask for their previous investments and case studies as well as reviews/testimonials online (reputable agents should display unaltered customer testimonials on their websites).
An alternative way of finding investor-friendly agents is joining a real estate investment meetup in your area. Such groups can help connect you with investor-friendly agents through referrals while also teaching about various exit strategies and standard investing terms.
Search platforms such as Roofstock can also help you identify investor-friendly agents. These websites scour listing sources like the Multiple Listing Service for properties that could appeal to investors before connecting buyers with agents who specialize in brokering great deals for investors.
An experienced agent can make all the difference when investing in real estate. By taking time to find one with expertise in your local market, you could save both time and money down the line. So make sure to do your homework and interview several investor-friendly agents prior to making a final decision.