Hire a Realtor®, Become One, or Look on Your Own? (or maybe all 3!)
When purchasing rental properties, most people plan for this to perhaps be a side job or something that might grow over time. Others will pursue this as a full time job and have investment property management their primary profession. Whether to use an expert or not really depends on the experience you have personally.
Benefits to Hiring a Realtor® for a Property Investment
You’re going to need assistance looking for houses, and I highly recommend that you hire an experienced Realtor®, especially if this is your first investment property. But you don’t want just any Realtor®.
The Realtor® who help you purchase your primary residence may be a fantastic Realtor®, someone you loved and who kept in communications with you the whole process, however, investment property purchases are a totally different ball game.
For this reason, I recommend find a Realtor® with experience in investment properties specifically. In fact, I highly, highly recommend using a Realtor® who owns investment properties themselves.
These agents will better understand the process of purchasing and owning an investment property because they have been through the process themselves. They know how difficult it can be to find a tenant, how tough it is to get repairs done, to find financing, or to go through the challenges of purchasing a property. So, find one who has the experience.
Have You Thought About Becoming a Realtor®?
“Why would I want to become a Realtor®? I’m not interested in selling properties.” Well, let me give you one good reason.
I know lots of people who’ve obtained their real estate license and became Realtors® because the get to search the Multiple Listings Service® (MLS) themselves. They also have access to IDX, which is an Internet Data Exchange. From IDX, all properties are available almost instantaneously when they hit the MLS. Plus, you can log on and search it anytime of the day – midnight, 2 AM, 6PM….all access, all the time.
Compare this to using a Realtor®, which means that in order to see the property or learn more about a property, you have to pick up the phone and call them, wait for them to be available, to see what’s new, get the information, see what time the can show you the property, and coordinate a schedule. Not that this as a problem, it just depends on what level of investing you want to do.
Realtors® also get to be their own representative, buying the property and earning the commission themselves, which can help with the down payment. Sometimes this can be several thousand dollars saved, so it might be an option you want to look into. Admittedly, becoming a Realtor® is not a cheap option as it’s going to cost you some money (a few thousand dollars) to get your real estate license. Then, of course, you’ll also have to learn the ins and outs of real estate and how it works.
Becoming a Realtor® yourself is only really recommended if you are going to sell properties and make a living at it or make your primary profession purchasing your own investment properties. As a Realtor® there are higher standards you have to abide by as a real estate licensee, and a lot more disclosures that come into play. It’s just much easier to not have to deal with that if you are not making property investment your primary profession.
Managing it on Your Own
Maybe you don’t want to become a Realtor® but because you are going to be buying and selling properties or buying and renting out properties, it could benefit you to sit in a classroom and learn what is or is not legal, what is or is not required. You can better understand title insurance, property types, background histories, title searches, etc.
These days, it’s not hard to do a search for anything you want and that includes Real Estate. If you are looking for listings you can start by visiting your local real estate offices’ websites, Realtor.com, MSN, Yahoo, etc.
Realtor.com is a great resource because the list all real estate listings throughout the whole country, so that’s probably the thorough and accurate. But it only includes listings that are listed by licensed Realtors®, so if you want to go above and beyond, you might want to check out other websites like ForSaleByOwner.com.
If this is your first investment, you may want to get some expert assistance because you are learning as you go. You’ll want to learn from the expert. If you choose to look on your own, I would recommend getting some help when you actually go to the closing table to ensure that the property is free and clear of all liens. You could use a real estate attorney if you choose not to use a Realtor®.
Other Topics By The High Heels Landlord, Cynthia DeLuca