If you are new to rental property investing, the first person you will need on your team is a real estate agent. A good real estate agent is the most important person on your team because he/she will be the one that:
- Makes you aware of what rental properties are available for sale, and coordinates the showings.
- Helps educate you on the details of the business as it relates to the local market (the best streets in the neighborhood, advice for handling tenants, etc.).
- Provides referrals of professionals you will need as your investment activity progresses.
- Coordinates the buy & sell transactions, including all negotiating, closing requirements, and associated documentation.
Requirements of a Good Rental Property Agent
You’ll want an agent that specializes in investment properties because this segment of the market is dramatically different than the primary residence segment. First and foremost, the negotiating strategy is different. For example, investors are generally more patient than homeowners in terms of waiting for the best offer, as they are bringing in rental income. Therefore, the sense of urgency is lower than for someone who, for example, must sell his home due to job relocation. Similarly, much of the emotional element of the transaction is eliminated when buying or selling rental property, because in these cases the numbers are king.
Additionally, you’ll find that an agent who specializes in rental properties tends to have access to “hidden” listings, as their selling clients are also likely to be investors, and it’s in the best interest of the agent to have both the buyer and seller of the transaction be his/her clients in order to maximize his/her commission.
Also, when looking at rental properties, you’ll have to work around tenant’s schedules, and having an agent that knows how to communicate with tenants can help in many situations. For example, if the tenant is unaware of the appointment and you essentially just “show up” without the tenant’s knowledge, an agent skilled in pacifying the tenant so that you can view the property while you are already there will save you a lot of aggravation.
Where to Find a Good Agent
To find a good real estate agent that specializes in rental properties, you’ll have to do a little prospecting. Here is what I recommend: visit realtor.com and do a search for investment properties within your market. The realtor.com listings do not provide the names of specific agents, but they do provide names and phone numbers of listing offices.
Within your search results, count the number of investment property listings per real estate office. Call the listing office that has the most properties for sale and say that you saw a property that you would like to inquire about. You will be transferred to the listing agent, who likely will be the primary investment property agent within that specific office. Tell that person you are looking to buy rental properties for investment purposes, and simply ask if you can be their client.
Working with Your New Agent
Ask your new agent to send you all the active rental property listings in your target area. Then you can run some numbers, do some drive-bys, and ultimately set up time to physically inspect the top few possibilities from the full list.
If you ultimately find that you do not like working with the agent, just rinse and repeat via realtor.com. I have never been bound by any kind of exclusivity arrangement with an agent for just looking at properties, so you can always move on to another agent if necessary.