There is a common debate among investors as to whether hiring a real estate agent makes sense. In some cases, real estate agents will save you time and money that can be better spent analyzing deals and looking for a new opportunity. But in others, the need may not justify the commission. Steven Taylor Taylor Equities is a prominent landlord with experience as both a broker and an investor. Experience in both areas means you can better understand the business from both angles. Below are a few things investors should consider when deciding whether it makes sense to hire an agent.
What kind of investing are you doing?
Whether or not it makes sense to hire an investor depends on what kind of investing you’re doing. If you’re flipping properties and you’re looking for a buyer as opposed to a tenant a real estate agent can help with many important aspects related to the close of the sale. But, if you’re a landlord looking for tenants in a busy market, it may not be worthwhile to hire an agent if you can find a steady stream of renters on your own. Unless you are investing in a property outside of your own city, in which case you may need the assistance.
How big is your portfolio?
The size of your rental portfolio will also impact whether it makes sense to hire an agent. Those who own multiple properties in different neighborhoods or cities may not be able to keep up with vacancies without some help. But a smaller landlord who owns one or two properties in a local neighborhood may not need an agent. You should consider hiring an agent if the revenue you’re losing from potential vacancies exceeds the commission, you’ll pay a broker.
What kind of budget do you have?
A real estate license is not required if you wish to sell your own property, and therefore it is an expense you can eliminate if you don’t have the budget. A broker will typically charge a 6% commission on a sale. Broker fees on rentals vary depending on the local market but are typically equal to one month’s rent or more. Those working with a shoestring budget may choose to cut this expense and do the work themselves. But those who have the extra room in their budget can often find qualified buyers or tenants much quicker by using an agent.
Ultimately, whether or not you choose to hire a broker to market your properties depends on your investing style and your personal preferences. But Steven Taylor Taylor Equities and other successful landlords typically suggest that anyone just getting started in real estate should consider it. Brokers can provide valuable insight and guidance that can prevent you from making costly mistakes. As long as you do your due diligence and find a hardworking broker who knows what to do, hiring an agent can often save you money in the long run.