There is not a real estate agent in the profession who has not been given, or at least will be given, the opportunity to sell income property perhaps no less then once per year. Not bad, considering an income property transaction can easily generate a multi-million dollar sale and substantial commission!

How do I assume that premise? Because real estate investors walk-in, call in, may be a previous customer, relative, friend, neighbor, or sometimes are merely uncovered during aggressive cold calling made by an agent seeking a residential listing.

This is how I made my first rental property transaction, many others did, and the way I have witnessed countless agents offered the opportunity. It is not a matter of skill or luck (at least not in the beginning), the opportunity to sell income property is statistical. Real estate agents (due to the very nature of our profession) are destined to encounter someone looking to buy or sell income property, at some point, during any given year.

Okay, but why is it that some real estate agents cannot (or do not) sell income property? Worse still, why do so many agents blow the opportunity? It is certainly not a lack of intention; I have yet to meet anyone willing to ignore a four of five-figure payday.

Psychology aside (I am a real estate broker, not a shrink), based upon numerous conversations with agents who have confronted me for investment property advice, I am convinced that most real estate agents give away opportunities to sell rental income property because they are so inundated with the concept of selling houses they swallow the myth that residential and investment exist in separate worlds, and the twain shall never meet.

In other words, the idea of selling income property is foreign to most agents; therefore, they neither prepare nor seek it. As a result, when presented the opportunity, the real estate agent does not act, is slow to act, reacts shamelessly, or refers the business away to someone else.

In real estate, any opportunity to make a sale is pure gold; real estate success thrives on opportunity. It is unreasonable, therefore, to think that any real estate agent would squander it away.

What should real estate agents do? Foremost, dispel the myth that residential and investment properties are distant cousins. Each concerns real estate with a buyer and seller, and if you are qualified to sell a house, you can sell income property as well.

Moreover (if it puts you at ease), consider whom it is who buys income property; the very customers you are conditioned to service, homeowners. Real estate investors are not from a nearby planet, they are normal folks who buy houses and then turn to real estate investing to get the best yield on their investment dollars they can.

Secondly, dispel the myth that investment property is ground strictly reserved for investing experts. Some instances might require a commercial specialist, but real estate agents can typically handle many rental property transactions.

Thirdly, prepare yourself to respond to real estate investment questions. If asked about a property’s cap rate or APOD, you should understand the question and have an answer. The inability to discuss these issues effectively is where real estate agents commonly fail to win the investor over and subsequently blow the chance to foster future dialogue. Real estate agents do not make points with an investor when they lack even a basic understanding of rental property nuances.

Fourthly, prepare yourself to service a real estate investor correctly. Real estate investing is not about kitchens and fireplaces, it is all about the numbers; real estate investors purchase cash flow. Be ready to discuss a property’s income, operating expenses, and cash flow. Have the ability to present reports, whether you create them yourself or use real estate investment software.

The idea is to align with the investor; show that you care about their money enough to provide them with an adequate investment property analysis. When real estate investors perceive that you are concerned about their investment, not merely looking for a one-time commission, they willingly become loyal customers, and in many cases, repeat customers.

Finally, prepare yourself to work with rental income property now. If you wait until you confront the opportunity, it may be too late. Not unlike any of us, once a real estate investor decides to buy or sell, urgency becomes an issue, and real estate investors are prone to discount the services of any real estate agent who reacts like a deer gazing into the headlights of a car because they are not suitably prepared to work with income property.

If you are a new real estate investor just starting a real estate investing strategy and considering the purchase of investment property, you need to know about the inclusion of contingencies in any offer to purchase intended to protect you.

Keep in mind, once you write an offer to purchase a property that seller accepts, you become legally bound to the contract and expected to abide by its terms and conditions or face possible legal action.

It is so important, therefore, when writing an offer that you include a couple of escape clauses referred to as contingencies and normally prefaced by the phrase, “Subject to…” in the selling agreement.

We will focus on four contingencies more intrinsic to real estate investing and necessary for investors of real estate investment properties and ignore other contingencies like loan approval, title, and pest and dry rot and other inspections (typical in most offers to purchase real estate).

• Interior Inspection of All Units- Because income property sellers commonly prevent buyers from entering the units without a signed, acceptable offer, you must be sure that your offer is contingent upon your satisfaction and approval of the interiors of all units.
• Approval of Rental Agreements, Books and Records- You must satisfy yourself that the income and expenses you were presented for the property is credible, and the numbers substantiate the seller’s claims.
• Approval of the Seller’s Schedule E Tax Form- You must see what income and expenses the seller has been reporting to the IRS about the property over the past several years. You might discover that the rents were recently boasted to market the property at a higher price, or uncover a recurring operating expense maybe not clearly apparent in the property’s proforma income statement.
• Seller Cooperation in a 1031 Tax Exchange- If you are purchasing the property as part of 1031 Tax Deferred Exchange, include a clause asking for both, the seller’s acknowledgement that you are in an exchange, and his or her willingness to fully cooperate with you in that exchange. This has little impact on the seller other than paperwork, and does not involve a fee or additional cost to the seller.

If you are working with a real estate investment or commercial real estate professional, or real estate attorney, these and other clauses essential to your investment property purchase will undoubtedly be recommended and included in the contract without having to request it.

by Kim Shufelt

Editor’s note: ProAPOD real estate investment software believes that this article might be of interest to rental property owners. Well behaved tenants, after all, are essential to the profitability of any real estate investment property and a goal most investing in real estate hope to achieve.

Living in a rental property affords convenience and flexibility to tenants, but also places on them legal and societal accountability. Taking care not to cause damage to a rental property is an obvious responsibility associated with renting a home, but making the extra effort to be a great tenant requires more. Establishing yourself as a model tenant involves meeting the obligations outlined in your lease agreement while maintaining a courteous approach to living in close quarters with your neighbors. The following tips are designed to help you establish a positive reputation and relationship with management and other residents of your apartment community:

-Remember: the lease is King. The lease you enter into is a contractual agreement between yourself and the management company or landlord of the property. Your lease dictates the specific terms to which you are accountable, so it is important to have a thorough understanding of its requirements. Being a good tenant means abiding by the terms of the lease in every way throughout your residency.

-Be courteous to neighbors. Even if your lease does not contain a provision about noise, it is a good idea to be conscious of how your actions may affect others in your apartment community environment. If you would not appreciate your upstairs neighbor hosting an all night soiree in his unit, it is best to refrain from participating in such behavior yourself. If you are inconsiderate of those around you, someone may file a complaint against you and mar your reputation with the landlord or manager. By being respectful of your neighbors, you will build a good name with the landlord and enjoy the respect of your neighbors in return.

-Leave no room for ambiguity. It is generally considered wise practice to put repair requests and other correspondence with management in writing. Your lease may even stipulate that you do so. Having a dated record of all correspondence between yourself and the landlord or management can protect your interests in the event that there is a misunderstanding or simple oversight. Maintaining proof of communication can be particularly beneficial if your property guarantees that repairs will be made within a designated timeframe, such as 24 hours. Besides safeguarding against discrepancies, making requests in writing may just earn you quicker service from a manager or landlord who knows he or she has an obligation to respond to your request.

-Pay rent on time, every time. Not only does paying rent on time each month go hand in hand with adhering to the terms of your lease, it shows your competence and contributes to your reputation as a dependable tenant. Failing to pay rent on time each month can leave your landlord with a negative perception of your competence as a tenant, which may contribute to an overall bad impression. If you have a reliable track record of paying on time each month, you will portray yourself as a model tenant and instill a positive impression, not to mention avoid consequences such as late fees or eviction. In the event that an uncontrollable circumstance does cause a delay in your rent payment, discuss the situation with your landlord or manager before the date rent is due. Having a perfect track record of paying on time will increase the chance that your landlord will work to accommodate you should adverse circumstances arise.

Being a respectful, courteous tenant may not only help you stay on good terms with your landlord or apartment manager, it speaks volumes of your character to your neighbors. Fellow tenants will appreciate your efforts to be a respectful and polite neighbor, and you may even make some new friends in the process.

About the Author

About the Author: Kim Shufelt is the CEO of www.Dallas-Apartment.com, one of the leading Dallas apartment finders offering free personalized apartment listings for Dallas and all other areas of the Dallas Metroplex. For more information, please visit http://www.Dallas-Apartment.com.