Hiring a real estate agent has always been a concern for real estate investors in terms of finances. Hiring one requires that you add the agent’s fees to your property expenses. Thus, is it a must to find a real estate agent or can you buy an investment property without one?
A real estate investor’s first priority is making money in real estate. Therefore, he/she always tries to cut down on property expenses. Now, keeping in mind that a real estate agent takes a 3% commission, it is too much for some, especially if you are on a tight budget as is usually the case with beginner real estate investors. However, let us see why you need to find a real estate agent to buy an investment property.
Why do you need to find a real estate agent when buying investment rental properties?
In this case, your real estate agent is a buyer’s agent, which means his/her duties are different from the duties of a seller’s agent. A seller’s agent is responsible for putting your investment property out on the market. Meanhile, as a buyer, you find a real estate agent in order to help you find and buy investment rental properties. This is, basically, the main difference. However, let us look at why you need to find a real estate agent when buying an investment property:
Providing advice is a huge part of a real estate agent’s duties. You should be able to consult with him/her and ask him/her any questions you have in mind in addition to giving him/her all your needs and goals of buying an investment property. In return, your real estate agent should be able to give answers to your questions as well as the best strategies to achieve your investment goals.
Find the best investment properties
A real estate agent is a professional in properties. Therefore, he/she is there to help you find the best investment properties in the area. A real estate agent helps you identify the right investment rental property based on specific analysis. This analysis includes real estate market analysis, where he/she compares investment properties to each other in order to find the best deal. It also includes investment property analysis which helps you decide whether the price you are paying is worthwhile.
Negotiations are part of settling deals when you buy investment rental properties. Therefore, what you need is to find a real estate agent with the best negotiation skills. That is the reason we have many real estate blogs on how to find a real estate agent. It is crucial to make sure you do not fall a victim of fraud. After all, a real estate agent knows whether a certain investment property is worth its price, and he/she is supposed to tell you. But it is not all about falling a victim of fraud. Negotiating a deal also ensures that you have all your needs fulfilled.
Part of being a successful real estate agent is connections. When looking for a buyer’s real estate agent, look for the one with the best connections. This is important because you will have to deal with other real estate professionals in regards to your investment rental property. Therefore, find a real estate agent who will be able to recommend mortgage brokers, appraisers, real estate attorneys, etc.
A buyer’s real estate agent does not only find the best investment properties but also shows them to you. Moreover, he/she should explain to you what makes this the best investment property. After all, it is your decision, and you find a real estate agent for help and guidance.
Can you buy investment rental properties without having to find a real estate agent?
Sure enough, you can! It is not easy though. You must keep in mind the previous duties we mentioned. It might get too overwhelming to do all that while being the property buyer. So, here is what you will need to do in order to buy investment rental properties without having to find a real estate agent:
First, learn where to find investment properties: Real estate agents have their own sources when it comes to searching for investment properties for sale. One of their sources is the Multiple Listing Services (MLS) website. That is the website where all sellers’ agents list their clients’ properties for sale. That is also where a buyer’s agent looks for investment properties for sale in the first place.
Second, learn the real estate metrics involved: You must know that a real estate agent depends on real estate market analysis as well as investment property analysis. Learning to perform these analyses requires that you know the basic real estate metrics. The cap rate and the cash on cash return are among the metrics that will help you identify the best investment properties. Doing proper math is not just for finding the right investment rental property. You will also be able to pick the right locations as well as to choose the right investment strategies for these locations.
Third, build connections: When investing in real estate, connections are crucial. As we mentioned, the duties of a real estate agent include recommending real estate professionals to an investor. If you choose to do it alone, then you will have to get to know these professionals yourself. Or, at least, you should know how to get to these professionals.
So, all in all, you will need to obtain proper real estate education in order to be able to buy an investment property without having to find a real estate agent. However, if you are a beginner real estate investor and about to buy your first investment rental property, then you might want to find a real estate agent as buying investment rental properties without a real estate agent requires experience in real estate.
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