Many real estate investors hesitate when deciding whether or not to hire a real estate agent. In terms of finances, hiring a real estate agent can be costly. So is it necessary to find a real estate agent to buy investment properties or can you do it on your own?
As a real estate investor, your number one priority should be to make a profit and generate positive cash flow from your investments. Cutting down on property expenses and saving a buck here and there is a key strategy that investors follow. Real estate agents take a 3% commission and this percentage can vary from one agent to another. If you’re running on a tight budget, having a real estate agent by your side can drastically affect your overall return on investment.
However, there are some cases where you need to find a real estate agent to ensure that you’re making smart investment decisions that are profitable. There are also cases where hiring a real estate agent is not necessary. Let’s take a look at both scenarios.
Why it’s necessary to find a real estate agent when buying investment properties
First things first, there are two types of real estate agents: a buyer’s agent and a seller’s agent. A buyer’s agent is responsible for finding you the best types of investment properties that offer high cash on cash return, cap rate and return on investment. A seller’s agent is in charge of putting your investment property out on the market and making sure that you make a profit from the sale. Our main focus today is BUYING INVESTMENT PROPERTIES and why you need to find a real estate agent when buying properties.
1. Offer a good piece of advice
A major role that a real estate agent plays is providing advice for real estate investors. Having an experienced professional to consult with and answer any questions you have in mind is the main reason why some investors prefer to find a real estate agent. In addition, real estate investors share their goals and needs with their real estate agent so that their agent can find the best possible way to accomplish them. Your real estate agent should be able to give you all the answers you’re searching for as well as the best real estate investment strategies.
2. Help you find the best investment properties
A real estate agent is an experienced professional in terms of investment properties. Therefore, they should be able to help you find not only the best but the most profitable investment properties in the location. How? Through specific real estate analysis. Real estate agents must be able to analyze the real estate market and compare different investment properties with each other to identify the best performing property for you. The analysis should take into consideration many factors such as cash on cash return, rental income, cap rate, the rate of return and whether or not the price you are paying for the property is worthwhile. This type of analysis, which is generally known as real estate market analysis, can be done with or without a real estate agent. However, if you are a beginner real estate investor, then you should find a real estate agent who can perform this analysis for you.
At the very least, as a beginner, ensure you have the right tools for analysis. Mashvisor provides investors with all the necessary real estate investment tools to make your property search easier. With our various tools, you can conduct a real estate market analysis and investment property analysis on your own in a matter of minutes!
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
3. Able to negotiate deals
You need to find a real estate agent with good negotiating skills to help you settle deals when you buy investment properties. There are many real estate agents who lack the ability to negotiate with sellers on a price. That is why it’s crucial to find a real estate agent who not only knows whether a certain investment property is worth its price but who can negotiate to receive the best possible price. Your real estate agent’s number one priority should be your needs. Therefore if your real estate agent can’t negotiate deals to satisfy your financial needs, then he/she is not doing the job right.
4. Able to recommend professionals
A successful real estate agent is one with connections! If you are looking to find a real estate agent to buy investment properties then find one with good connections. This is important because you will have to deal with other professionals in real estate in regard to your investment property. You will need to deal with mortgage brokers, real estate lawyers, appraisers, and many more. That is why you need to find a real estate agent who can recommend these real estate professionals.
5. Able to show you properties
When buying an investment property, you not only have to find it but see it as well. That is why your real estate agent should be able to show you different investment properties and should be able to explain to you what makes this property the best. In the end, you need to find a real estate agent who can help and guide you to success.
When is it NOT necessary to find a real estate agent to buy investment properties
1. When you have the right knowledge
You do not need to find a real estate agent if you have the right amount of knowledge in real estate investing. When we say knowledge, we don’t mean a college degree in real estate. Due to the widespread of technology and different real estate investing websites, you can gain all the required knowledge right at your fingertips. There are various real estate investment books, blogs and articles out there that explain every aspect of real estate investing in detail.
Start gaining your real estate knowledge with Mashvisor. We have more than 2000 blogs that will guide you through real estate one step at a time. Visit Mashvsior’s knowledge center and begin learning today!
2. When you have the right tools
Like we said earlier, the main duty of a real estate agent is to find the best investment properties that match your financial needs. It isn’t necessary to find a real estate agent if you have the right real estate investment tools to help you find properties. There are real estate investment tools all over the internet that can be easily used by any real estate investor, experienced or not.
Mashvisor has an array of tools like our rental property calculator which can help make all your needed calculations much easier. We also have a property finder tool which will help you search up properties in the city/cities of your choice that match your search criteria and rental strategy. With tools like these, hiring a real estate agent will just be a waste of time and money.
Do you have a free Mashvisor account? Click here to use our Property Finder and find properties in a matter of minutes!
3. When you are willing to go through the hassle
So many real estate investors choose to find a real estate agent just for the sake of not having to go through the trouble of doing the work themselves. However, if you are a real estate investor that wants to save money and generate more profit then going through the hassle alone should not be an issue for you. You should be willing to manage all the related tasks alone. It might be hard but think about the rewards you will be receiving in the end.
The bottom line
To find or not to find, that is the question! So many property investors stop and hesitate when it comes to hiring a real estate agent. Everyone has their own perspective on this topic. Share yours in the comments below! Ultimately, it all depends on your financial situation and real estate investment goals.
To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.