Most residential agents I’ve known throughout my real estate career have expressed a desire to sell rental income property. Some, of course, have seized the opportunity and in fact do service investment property alongside their residential real estate business, and others have not.
As a former realtor who also kicked around the idea early in my career, and then ultimately serviced income-producing property exclusively for the majority of my thirty years, it seemed needful to pass along a simple 5-step plan for those of you who have yet to make the transition.
1. Consider Who Buys Rental Property
Foremost, understand that as a realtor with even minimal experience it is highly probable that you’re already surrounded by potential real estate investors. After all, it is homeowners who also buy rental property.
In other words, as a residential agent who has already established a relationship with those you’ve sold a house, you also have at your beckoning someone who may purchase a duplex, apartment building, or other type of investment property; so many of you already have access to potential investors no further away than your customer contact list practically by default.
2. Know You Can Sell Rental Property
The misconception among most residential brokers is that income property is a specialty business confined only to commercial brokers and the idea of making it a part of their real estate business should never be considered.
Yes, there are some commercial properties best left to commercial specialists, but this is not about high-rise office buildings or investment conglomerates. What’s in view here are the “mom and pops” that are investing to supplement their income or planning for retirement.
And in this case (other than a few nuances associated with investing discussed later) selling residential income property is really much like any residential transaction, and anyone can do it. How do I know? Because if I did it than you can, too.
3: Show Yourself Engaged
Real estate investors are not going to have complete confidence in any realtor who doesn’t convey some amount of interest in rental income property.
So spend a few hours getting acquainted with some of the popular returns and reports associated with investing such as a cap rate and APOD. And though it’s not free (consider it an investment), purchase a quality real estate investment software solution so you can run the numbers and present cash flow reports to your customer.
Remember, first impressions are the most lasting. Therefore the more engaged in investing you initially appear to an investor, the better your opportunity to gain his or her confidence that you’re a notch above the average residential agent and the better chance you’ll gain long-term loyalty.
4: Act like a Partner
Act like a “partner” by your actions and deeds to convey to your customer that you are as committed as they are to protect their nest egg and really do care how their money gets spent.
Listen to what your investor’s investment objective is and resist the temptation to just forward information on every rental income property available for sale. Be selective. Evaluate the numbers yourself beforehand and present only those properties that are in the range of price, profitability, and rates of return that are compatible with your customer’s goals.
If you follow my suggestions (above), than this type of analysis on any income-producing property won’t be that difficult. It will, on the other hand, clearly demonstrate to your investor that you care enough about his or her money that you’re willing help them make a thoughtful investment decision.
5: Stay the Course
Remain proactive. Continue learning as much as you can about the real estate investing nuances and your own rental income market. Keep tabs on what rental property is currently available for sale, and know at what price other similar properties have recently sold.
The idea is to stay the course. Don’t just settle for one deal, but actively pursue building and growing an investment real estate business. You won’t regret it.