Good real estate properties earn steady rental incomes and offer profits if you eventually sell. These diamonds in the rough are critical in building a profitable real estate portfolio.
Of course, working with a real estate agent is the most efficient way to find these properties. But a typical agent won’t have the unique expertise needed to work with investors. What you’ll need is an investor-friendly real estate agent.
In this article, we’ll explain how investor real estate agents differ from the typical agent. Then, we’ll explore the benefits of working with investor-friendly agents and cover traits to look for.
An investor real estate agent is simply a real estate agent who understands the specific issues and goals of real estate investors.
See, homebuyers and investors differ in many of their real estate goals and preferences.
Most agents serve homebuyers. They’re used to finding homes their clients find cosmetically and aesthetically appealing. Homebuyers care about their home’s value and potential future appreciation, but that’s secondary to enjoying living in their home.
For investors, on the other hand, real estate is strictly business. They want the financials — a property’s potential ROI, after-repair value (ARV), tax implications, and more. Many agents don’t know much about the financials or lack the experience to evaluate them adequately.
Fortunately, some real estate agents specialize in finding excellent properties for investors. These are the agents you should look for as an investor.
Investor-friendly agents offer investors plenty of benefits in building their real estate portfolios:
First and foremost, investor-friendly agents understand that you care strictly about financials.
They’re experienced in finding properties that offer the best financial return — whether you’re flipping homes for profit or holding properties long-term for rental income.
The MLS has plenty of properties. However, many excellent opportunities may not be listed on the MLS. These can include pocket listings — properties marketed to public buyers outside of the MLS — and properties that haven’t hit the market yet.
Investor-friendly agents may know about these properties through their networks and can help you visit them. As a result, you have access to more properties in potentially better locations.
Additionally, these off-MLS properties may have less buyer and investor competition. This shifts the negotiating power towards you during the purchase process.
Pro-tip: Sign up for our pocket listings here. We’ll send you exclusive, off-market deals and, if one seems like a fit, connect you with an investor-friendly agent in the local market.
Some areas within markets are better for renting, while others may favor house flipping.
Good agents can analyze the markets you’re exploring and your own business to see if renting is right for you. If renting is the way to go, they can also help you set your rent to maximize ROI without pricing out prospective tenants.
Real estate investors may qualify for various tax benefits depending on their business and the properties they own. Such tax benefits could save you money — money to reinvest into your properties.
Investor real estate agents are well-versed on potential tax benefits. They may even have connections with tax experts who can help you minimize your taxes while staying compliant.
So far, we’ve covered why you need an investor-friendly agent vs. a general real estate agent.
But to reap the full benefits, you need to know what makes a great investor agent. Let’s look at a few traits to keep an eye out for:
Strong negotiation skills can impact your bottom line as an investor. Agents excellent at evaluating properties and being assertive at the negotiating table can score the best deals on high-quality properties.
Those negotiation skills will come in handy once again if you decide to sell. Your agent will deftly highlight all the factors making your property a fantastic find — helping you obtain a better selling price.
Any investor real estate agent is better than a homebuyer agent. However, you should prioritize agents that specialize in your real estate business model and the types of properties you prefer.
For instance, if you’re a house flipper, you’ll want an agent who’s worked with house flippers before.
On the other hand, perhaps you invest in small, multi-family properties for rental income. Finding an agent with experience in these properties is your best bet. They’ll be able to help you better than a more general investor agent.
Many agents hone in on a particular area, such as a city or metro area. However, the best investor-friendly agents can niche down to specific neighborhoods.
These agents have an intimate understanding of these neighborhoods. This knowledge is handy for picking properties and negotiating during the purchase process.
Good real estate agents have professional networks made up of a diverse array of helpful professionals.
This can take the burden off of you when searching for property managers, contractors, lenders, attorneys, and more. You’ll save months, if not years, finding these professionals and building relationships with them.
To investors, real estate is strictly business. You want an investment property that pays you income, not a home to live in.
A good investor-friendly agent understands why you make ROI a top priority. What’s more — they know what impacts a property’s potential ROI. They know what can squeeze more returns out of a property and what could harm those returns.
For these reasons, some investors choose to work with agents who own investment properties. After all, there’s no better teacher than firsthand experience.
An investor-friendly agent uses their intimate understanding of local markets, financial metrics, and investing business models to help you find great deals with high profit potential.
However, most real estate agents work with general homebuyers. Make sure you look for the traits we covered, and prioritize agents with experience in the properties you’re looking for.
Do it right, and your agent could become one of the most lucrative assets in your real estate investment pursuits.
Whether you’re purchasing one investment home or one hundred, you don’t have to go it alone.
If you’re ready to buy your first (or next) investment property, here are 3 steps to get started today:
McKenna is an Evernest Content Strategist based in Denver, Colorado. Her expertise spans the real estate and home financing sectors. When not writing, she enjoys picnics, yoga, and antiquing.