In this article, I want to share with you why residential real estate agents should sell rental property to supplement their real estate business, some truths and myths about selling income properties, and how a good real estate agent software solution can help you prepare.
Benefits of Selling Income Property
Money, of course, is the primary benefit of working with rental properties. When I started selling real estate, the average commission for selling a house was about $1,500 after the broker split. When I made my first income-property sale as a residential agent, I made $15,000 after the broker split. That sale took place in 1978 and having gotten a taste, I choose to make rental properties my business as a result, have been selling income-producing properties exclusively for the past thirty years.
But I digress.
This article is not about getting you to forsake your current residential business to become a multifamily specialist, it’s about getting you to become a real estate agent who can (and will desire to) sell investment property in addition to single-family homes because the money is good.
Let me give you one example of a residential agent here in Salem, Oregon that merely called a FSBO regarding a small vacant lot that ultimately connected her with an apartment builder who subsequently allowed her to list about sixty apartment units. She never stopped selling houses, but because she thought outside the box and also made an effort to expand her residential business, she unwittingly fell into investment real estate and made a sizable commission as a result.
Another benefit of being able to work with rental property, especially for those of you who have been successful at selling houses and have a sizable customer list, is that you have at your disposal a ton of potential investors. Given this economy and the fact that banks are only paying about 2% to use our money, it might surprise you to discover that homeowners who have never invested in rental property are more open to the idea now than ever before.
Lastly, it benefits you to have the ability to sell income-producing properties because it prepares you to service walk-ins and others who inquire about income property. So you never risk losing a sale opportunity or have to refer it away because you’re not prepared to work with real estate investors.
You Don’t Need to Become a Specialist
The beauty of rental properties is that you don’t have to become a specialist or have any special training to sell it. Naturally, there are exceptions with some types of commercial property, but at the end of the day, most properties associated with real estate investing require little preparation on your part.
How to Prepare
Bear in mind that real estate investing is about the numbers—cash flow, rates of return, and profitability. Therefore, obtain good real estate agent software that will enable you to run those numbers correctly (and easily).
A good real estate agent software solution will provide you with cash flow presentations you can give to (and capture) investors and, just by virtue of using the software, enable you to learn all you need to know to service investment properties adequately. As an added bonus, having the ability to create multifamily cash flow and rate of return presentations, you may even get some referral business from colleagues.
Here’s to your success.