For those seeking to increase their wealth beyond businesses and equities, investing in real estate can be a very profitable venture. Whether it’s holding property for long-term capital appreciation, flipping a house, or renting out a valuable estate, investors can expect high returns actively or passively.
Ultimately, success in real estate investing depends on capitalizing on the right deals, and this is where an investor-friendly real estate agent comes in.
Although the market is flooded with competent brokers and realtors, not everyone has an excellent understanding of investment properties. Finding the right real estate agent for you is a trial-and-error process that can be lengthy if you’re not sure what to look for. Here are some questions you should ask before committing to one.
What to Consider When Choosing the Right Agent
Are they extremely knowledgeable about the local market?
If you’ve decided to invest in real estate, then you’ve probably thought about the specific city or area that you want to make an investment in. When searching for a real estate agent, start with the city or state you’re focusing on and look for reputable brokers within it. The more you hone your search in terms of location, make sure any broker of interest is knowledgeable on that particular area – be it a neighborhood, town, etc. Have they closed any deals there?
You want them to be able to identify which properties within your desired market are appropriate for your investment goals. The more familiar they are with the location, the more equipped they’ll be to do this. Also, if they do a lot of work in the area, chances are they’ll have access to listings that haven’t officially gone on the market yet.
How is their past performance as an agent?
As with any type of investment, finding the right real estate agent requires you to do your due diligence. Start by checking their company website for their credentials, level of experience and any awards or accolades they may have received over the years.
Once you’ve whittled down your choices to a more targeted list, look to see how other clients enjoyed working with those agents. If you know anyone personally you can reach out and ask. If you don’t, look for online customer reviews to glean insights into the agent’s character, work ethic, knowledgeability, and negotiating skills.
You also shouldn’t be afraid to ask the agents themselves for references of other investment clients they’ve worked with. If they don’t have any, this is an indication that they don’t have any experience with investment properties. If they don’t want to provide you with references, that’s a red flag that they may not be easy to work with.
Is the agent skilled in your choice of investment?
Narrow your choices even further by determining whether an agent is an expert on the specific type of real estate investment strategy you’re planning to make.
The real estate landscape can be quite cluttered, especially in larger, more popular markets. Some agents may decipher themselves by focusing their expertise on a specific type of investment like house flipping, rental properties or buy and hold properties.
For example, agents that specialize in helping clients with house flipping will have more knowledge on less desirable properties in the market (those in poor condition, foreclosures, etc.) than those who are on the lookout for houses in prime condition. Find an agent that is proficient in the type of investment you’re gunning for.
Do they know how to crunch the numbers?
If you’re investing in real estate for the purpose of generating income, then finding a property that yields the strongest return is going to be your number one objective. You’ll want an agent that is well-versed in calculating the relevant figures for the return on your real estate investment(s). Having the technical knowledge and skills to help you maximize your investment is what will set an investor-friendly agent apart from a regular one who solely finds clients their next home.
If you want to buy and hold, your agent should know how to calculate the future value of a property. If you want to become a landlord, your agent should be able to evaluate the cash flow of a property. If you’re hoping to flip a house, your agent should be able to estimate the after repair value (ARV) of a property. Be sure to discuss your investment goals with the perspective agent to gauge their ability to help you reach those goals.
Investing in real estate can be an arduous process, but the right agent can greatly minimize the stress that comes along with it. In the end, choose one that not only ticks all the boxes presented in this article but also represents your interests diligently and faithfully.