Real Estate Investing
How to Choose a Real Estate Agent When Buying an Investment Property
Belong on Jun 9, 2022
If you’ve decided to search and purchase a real estate investment property, one of your first steps will be to find the right real estate agent. Even if you have worked with an agent in the past, choosing a real estate professional for investment purposes requires additional preparation and careful consideration.
Top three suggestions for choosing a real estate agent when you want to buy an investment property:
- Know what qualities you are looking for in a real estate property and an estate agent.
- Interview at least three real estate agents who have experience helping investors find potential properties in your desired neighborhoods.
- Choose an investor-friendly agent who can help you find, evaluate, and purchase a profitable real estate investment.
How to find real estate agents
If you haven’t worked with a real estate agent in the past, you’ll want to identify several candidates to interview. With any luck, you’ll likely have several options to choose from.
Source trusted recommendations
To find your ideal real estate agent, start with a few recommendations from close friends and family. These suggestions will likely come from people who have worked directly with a real estate agent.
Leverage your network
Professional networks are another excellent way to find a real estate agent for your investment property search. You might consider starting with your financial advisor, accountant, or lawyer. Their go-to real estate agents will likely share some or all of the qualities you appreciate in those professional relationships.
Ask other investors
If you have good relationships with other real estate investors, they’ll likely be willing to refer you to their real estate agent. Asking your fellow investors is an excellent way to connect with real estate agents who are likely to be a good fit.
Prepare to interview potential real estate agents
In choosing a real estate agent for your investment property search, it’s essential to speak with several potential agents. We recommend you make several determinations and prepare a few questions in advance. Some agents may also offer to see a few properties with you so you can get a sense of their approach.
Decide on location and price
To find the ideal real estate agent, you’ll need to have a clear sense of what you are looking for in a real estate investment. To find the best fit, you’ll need to decide which neighborhoods and property types to target. Are you looking for a single-family home in the suburbs or a duplex in the city center? Finally, you’ll need to have a clear budget in mind.
Revisit real estate investment fundamentals
Ideally, the real estate agent should be knowledgeable about real estate investing. If you’re not familiar with the best practices for investing in real estate, it may be challenging to identify the most knowledgeable agent. If this is the case, we recommend you research the basics of real estate investing.
Questions to ask potential real estate agents
Once you’ve identified potential real estate agents, consider making a list of questions to ask. These questions will ensure that you have all the information you need to make a good decision.
Experience & background
- When did you become a real estate agent? Why?
- What did you do before you became a real estate agent?
- Are you a full or part-time real estate agent?
- Are you an independent real estate agent, or do you have a brokerage?
- Which communities or neighborhoods are you most familiar with? Do you have personal ties in specific communities that help you assist clients?
Real estate philosophy & approach
- How do you like to work with clients?
- Do you have a specific process you want to follow?
- What do you expect of your clients?
- How available are you to your clients?
- How much communication can I expect from you? How responsive are you to client calls and emails?
Real estate investment experience
- How familiar are you with real estate investing?
- Do you have any real estate investments? Where are they?
- Have you worked with other real estate investors?
Commission and fees
- What is your standard commission? Are you willing to negotiate your commission?
- Are there any additional costs or fees?
How to choose a real estate agent
How much do you enjoy spending time with this person? You’re likely to spend quite a bit of time with whatever real estate agent you choose, and your general inclination towards someone is a good indication of how you will work together. While this shouldn't be the only factor in your decision, it’s worth considering.
Shared vision and understanding
Consider whether or not a particular real estate agent understands your vision and desires? If you don’t have a mutual understanding, it’s unlikely to be a productive relationship. What is your definition of success, and does this particular agent share that perspective? When you agree on the goal, you’re more likely to achieve it.
Location and network
Is the real estate agent familiar with the neighborhood or communities you want to target? If they are well-connected and knowledgeable about specific areas, agents can point you towards unique or off-market opportunities.
Qualities of good real estate agents
Choosing a real estate agent when you want to buy an investment property requires careful judgment. Exceptional real estate agents share a few qualities that make them uniquely qualified to guide you through purchasing a real estate investment property.
Tenacious: Are they willing to hunt down the right property for you? Will they write multiple offers to ensure you get the best deal?
Collaborative: Is it in their nature to be proactive and helpful? Will they treat your real estate investment search as a shared opportunity? Are they willing to lend their expertise to your search?
Honest: Ultimately, you’re choosing someone to represent your financial interests. You’ll need to ensure you select someone you can trust to act with integrity.
How to identify investor-friendly real estate agents
We recommend choosing an agent with substantial real estate investment knowledge for the ideal outcome. Working with an investor-friendly agent will give you a clear advantage in your search for an investment property.
Look for agents who have a strong understanding of the current real estate market. Agents who closely follow market trends are more likely to provide you with helpful insights and write advantageous offers. Investor-friendly agents can speak to trends or shifts they see among other investors.
By choosing a hyper-local real estate expert, you’ll have access to crucial real estate investment information. Investor-friendly agents may be more familiar with zoning changes and upcoming developments, which can help you choose a property with the most potential. They can also help you consider parking, public transportation, and school districts. This information is vital in determining an investment property's potential long-term value.
Familiarity with real estate investment basics (and an understanding of how they work at the local level)
Your real estate agent must understand the fundamentals of real estate investing. An agent who speaks intelligently about cap rates, cash flow, and local rental rates is likely to be most helpful in your search for a real estate property. Perhaps most importantly, they need to have the ability to translate this knowledge into your local real estate market.
Knowledge of renovation ROIs
If your real estate investment is likely to include renovations, it’s helpful to work with an agent that can provide feedback on potential changes and updates. What types of renovations are likely to increase the value of a property or attract potential residents? Their experience working with real estate appraisers can also provide helpful suggestions.
Experience with short sales, foreclosures, and REOs
It’s worth asking your potential real estate agent about their experiences with short sales, foreclosures, and REOs. These properties typically sell at a lower price compared to MLS listings. While these properties are similar, they each have characteristics that require a unique strategy. If your real estate agent can help you navigate the search and purchase of short sales, foreclosures, or REOs, you may have a potentially lucrative opportunity.
Ability to assess potential properties and deals for opportunity
Choosing a real estate agent impacts your negotiating power almost more than any other factor. An excellent real estate agent can help you evaluate opportunities based on fundamentals like renovation costs, taxes, and rental income.
A real estate agent experienced in real estate investment can offer you even better tools to evaluate opportunities. They’ll have the ability to factor vacancy allowances, capital expenditures, repairs, maintenance, and even lawn care into potential prospects. With a strong understanding of these details, an agent can help you craft mutually beneficial offers that are more likely to result in a profitable real estate investment.
Final real estate agent consideration
In choosing a real estate agent, they may ask you to sign an exclusive agency agreement, and these agreements may or may not be required to work with a particular real estate agent. As with many decisions, there are both advantages and disadvantages that heavily depend on the specifics of your real estate investment search.
If this is your first time working with a real estate agent for an investment property, we recommend that any agreements are limited in their length and scope. You’ll also need to verify that you can break these agreements if agents are unresponsive or you discover that your approach is no longer in alignment.
If you choose a real estate agent based on our suggestions, you’re more likely to enter into a mutually beneficial relationship where exclusivity agreements are a non-issue.
Certified Investor Agent Specialist (CIAS)
A Certified Investor Agent Specialist™ (CIAS) is a real estate agent who has undergone additional training to serve clients searching for a real estate investment property. A CIAS designation can be a helpful way to identify real estate agents who have education and experience in real estate investing. However, an agent without this certification can still provide the same insights and expertise.
After you’ve found a real estate agent for your investment property, consider Belong
Once you’ve chosen a real estate professional and found the ideal investment property, you can start to consider other professionals to aid in managing your new investment. Belong offers significant benefits to increase returns and limit hassles related to your new investment property. We’ll help you price your rental home for maximum cash flow, and guarantee rental payments while you work with us!
Belong works with owners to attract, screen, and retain residents who will appreciate your property. We aid in preparing a new home for residents, and our team of full-time professionals will complete any maintenance or repairs. Once we’ve found the right resident for your property, our team will collect rent, schedule home visits, and build a connection with your resident and their new community.