Investing in Real Estate Begins With Finding the Right Realtor
Buying real estate, whether as a potential homeowner or property investor, is serious business. When looking for a realtor to help you in one of the biggest financial decisions in your life, there are some questions that can help you decide if the realtor you are considering is a good fit. Ask your potential real estate agent how they determine if a specific property has the makings of a sound investment. If that agent doesn’t have a method to evaluate a property’s potential that covers items like cash flow, likely returns on the investment and cap rates, you might want to consider a new realtor. Good real estate agents use things such as investment calculators to project investment profits, and have a strategy to improve those profits.
Find out if your agent is also an investor. Agents must have a good understanding of the investment process as well as the insider language. Having someone versed in strategies, financing and how to find the good deals is a plus. Does your real estate agent work with investors often, or at all? Most agents focus on residential sales and rarely handle investment properties. They may be up to snuff on the residential homeowner front, but learning as they go when trying to set up your investment deal. Investment real estate requires a focus on the client’s bottom line.
If you’ve found an agent that specialized in investment properties, ask them if they have a particular specialty within that market. Someone who is selling light-industrial or shopping centres may not be as knowledgeable in the condo market, which attracts a different clientele. Negotiation techniques and the end product vary greatly between each market. You can also find out what your potential agent knows about the investment market you are looking at. Someone well versed in selling real estate in specific area may not have a handle on what is up and coming in the investment industry. These are two very different provinces and two very different mindsets to consider, with their own quirks, regulations and price-points.
Is your potential agent familiar with selling strategies that are somewhat outside the box? Are they familiar with lease-to-own options or using seller financing? These are just two methods that can increase your investment opportunities and make you some additional cash. If your real estate agent is unfamiliar with these options, it’s time to move on.
Lastly, ask your potential agent if he has all the resources readily available to make sure your transaction is as seamless as possible. That means having a team of appraisers, mortgage brokers, accountants and lawyers that are ready. An investment real estate professional should offer one-stop shopping from the time you engage their services until the transaction is finalized. Ask for references and take the time to get some feedback before you place your investment business, and your wallet, in a real estate agent’s hands.