Anyone who wants to sell or buy rental property would be wise to consider using the services of a real estate professional to assist them. I know, it sounds strategic, but my intention is not to dissuade real estate investors from selling or buying rental property on their own, or to promote any real estate service.
My intention is merely to offer investors an insight often overlooked about ways a real estate professional can be of benefit inside the sale and purchase aspects of investing.
1) You Want to Sell Rental Property
In this case, you have two concerns: You don’t want to set a price so low that you lose money (of course not), or too high that the property just sits on the market and collects dust. Your objective, of course, is to close the transaction as quickly (and profitably) as possible so you can collect your money and move on to the next investment opportunity.
Here’s how a real estate professional can assist you.
They understand the market where your property is located and have a number of resources generally at their disposal that can help you set the correct market value for your income property. As a member of the local MLS, they would have easy access to Sold, Pending, and Expired data, so they can tell you at what price other properties have been selling or not selling.
Real estate agents also commonly have open dialogues with local real estate appraisers. Why is this important? They would have reliable, first-hand information about the cap rate and cost per unit that income properties similar to yours recently sold. This is especially helpful for those transactions that were not listed in the MLS, and otherwise not so readily available to the public.
Simply by virtue of their profession, then, real estate agents have a better understanding of the local market than a layperson, and thus better prepared to suggest a true fair market value for your apartment or commercial building.
2) You Want to Buy Rental Property
Fair enough, you want to purchase investment property, but where do you look to find one? For unlike residential properties, commercial property owners typically are reluctant to openly expose the fact that they are selling the property; fearing that it would be a disruption to their tenants and could cause vacancies. So you have to rule out the classified section of the local newspaper and For Sale signs. Consequently, unless you personally know of someone selling rental property, you might not find anything to purchase.
Here’s how a real estate professional can assist you.
They might be aware of a “pocket listing” on a rental or commercial property. That is, they are privy to a property wherein the owner has expressed an interest to sell but not formally “listed for sale”. This is very common with commercial property, because as stated, owners tend to hold their cards close to their chest and seldom openly broadcast their intentions around town.
Bear in mind that real estate agents rub elbows with investors and others who deal with investors. After all, this is the nature of their business. Therefore by turning to them to become your eyes and ears in circles where you are otherwise excluded, chances are good that they could turn you on to investment opportunities few others ever will learn about.
More can be said how you can benefit from a real estate professional, of course. We just touched on two aspects of the process, and just barely. But hopefully you get the point. If you are serious about building and growing your real estate investing business, and currently making decisions about selling or buying, by all means, work with a competent professional. At the end of the day, you will be glad you did.
