Starting Your Investment Property Search, Don't Call A Realtor!
So, you’ve just heard all about how great it is to invest in real estate during a night out with your pals. One of them just recently bought a 3-family house in the city and is telling you about all the extra income he now has! You’re hooked! After you go home that night you think about all the opportunity you can create for yourself and family, while slowly shedding off the responsibility of your pesky boss and annoying co-workers; HAHA! Now the time comes where you need to start thinking about your first step. How do you get started? Where do you get started? Who is the right person? The message of this article is going to tackle who you SHOULD NOT call to start your investment property search. That person, who you should avoid at all costs, is a realtor.
Realtors, like it or not, specialize in the purchase and sale of owner-occupied homes in my experience. Don’t get me wrong, many of them actively sell and purchase investment properties on behalf of clients, but from what I’ve witnessed it’s not their strong suit; for many reasons. I will go over those reasons now!
They Are Not Rental Property Specialists.
What I mean by this is that their job title is one that varies in nature as it requires many different hats to be worn. From advertising, showings, contract prep, inspections, appraisal assistance, customer service, and beyond. These are all tasks that they must repetitively do with new clients on a rotating basis. Due to this, they can only be so effective overall until they become maxed out physically, mentally, or by time in general. They are running to showing in East Greenwich, then opening a door for an inspector in Attleboro, and then shooting back down to North Kingstown for a follow up on a maintenance repair required by an appraisal. The constant jumping around is inevitable in their trade, and my comments here are not meant to discount them in anyway. However, what many of them will agree with is that the profession is very time consuming and often stressful. With that said this is the 1st reason as to why you do not want a realtor leading your charge into a career in investment property. They do too many things on a daily basis that it prevents them from being the best at just 1; which in this case is rental property search + eventual management.
Where Will They Be After The Closing?
Let’s be real here, realtors are in this profession for the money. So, after they close on your newfound house it’s going to be common that you no longer hear from them. Usually because they are busy doing all the things I mentioned above. It doesn’t mean they don’t like you; it just means they are busy! So, if you have a question, or need to have a sit-down meeting, or just need assistance handling a tenant they simply can’t be there for you on a reliable basis. When you get involved with investment property you will need an active mentor. The mentor is like a parent in a sense. They aren’t always there constantly, but when you need them you can count they will pick up the phone or be able to see you as soon as possible with the best advice.
They Don't Know Know How The Property Management Business Operates.
Dealing in real estate sales versus rentals is totally different ball games. It’s like being a dentist compared to being a heart surgeon. Yes, both are doctors, but they are totally different fields with their own intricacies. The thing with rentals is that there are daily (forever), recurring issues that need to be maintained and handled efficiently. Real estate sales are finite in nature because they have a start and a finish line (the closing). Rentals are infinite, and only get more complicated with time. So, with this in mind it’s imperative you think about who best fills that role, and how they can assist you in your future successes.
If you haven’t guessed by now the person that you need (from day 1) is a qualified, full-time property manager. A property manager has his/her real estate license, so they are familiar with the principles, but they specialize in the business you are getting into. They deal with tenants daily, handle maintenance, perform leasing functions, and can even take care of your evictions for you. These are all tasks that a realtor just isn’t qualified or interested in doing. If you utilize a realtor to help with your search you may end up with a house that you regret. I’ve seen it many times where investors buy a property, and within 1 year it’s back on the market for sale because the numbers just don’t work. Your property manager can also assist with your rent forecast based on their current data, and even provide a projected return on investment. Realtors are great at what they do, but in my experience it’s best that they leave the management to us managers the same way we leave the sales to them! =)
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Gregory Rice is the Vice President of franchise sales for Nexus Property Management™.
Nexus Property Management™ is a National Property Management Franchise that manages all types of rental property from single family homes or condos to large apartment buildings and complexes.
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