Whether you are flipping or renting, there are definitely some tricks to getting the highest income! There are also choices to be made.
Selling the Property
If, when working through step 6, you concluded that your property would be best suited for selling, then you now must decide between employing a realtor to sell the property for you or selling the property yourself.
- Benefits of using a realtor –
- MLS – this is the biggest benefit. Being listed on this service gives you a much larger audience than self listing.
- Convenience – having a realtor means that they will complete the negotiations and handle all the paperwork. You can also request that they conduct open houses to market the house.
- Marketing – Your realtor will complete your flyers, hang a sign and advertise your property (depending on your agreement)
- Advantages of Selling the Property Yourself:
- Expense – realtors generally charge 6% of the sales price. This is a significant expense. However, even if you sell the home yourself, you an be facing the same fee with none of the benefits of having your own realtor. If your buyer has a realtor, the entire 6% is awarded to that realtor, and you still pay the fee.
When flipping, regardless of whether you employee a realtor or sell the property yourself, there are unique attributes to closing a home originally purchased on a Sheriff Sale, and for this, you MUST find a Title Company that has experience with Sheriff Sale properties. Otherwise, you may sentence yourself to encountering problems like those described in my own experience with title companies.
Renting the property
If you have chosen renting rather than flipping the property, you have more evenly weighted options for completing the deal!
- Benefits of using a realtor
- MLS- MLS remains a benefit in renting a home, but it does not provide as significant a role. Renters more frequently drive a neighborhood looking for rentals, or are told by a neighbor about a rental. Although they do sometime use realtors, they are less likely to do so.
- Convenience – The same advantage of convenience exists, but again, to a lesser degree. There is far less paperwork involved in rentals, and no “closings”, so a typically savvy businessman could easily handle this without the help of a realtor. However, you would be required to meet strangers and allow them to see the property. If you are uneasy about this prospect, or the home is in a questionable neighborhood, a realtor could provide a significant advantage for you.
- Advantages of Selling the Property Yourself
- Expense – Clearly the biggest advantage is expense, but again, expense does not weigh as heavily as when you are selling a home. Typically the expense saved only amounts to a month’s rental income. If the property is rented a month sooner than it would be with you renting the property yourself, you have recovered your money and saved yourself time and effort.
Bottom line, it really depends on the property and on the investor. If you are renting a property in lower income areas, you are less likely to benefit from a realtor as this target prospect uses realtors and their services less often for rentals. However, if you are uncomfortable with meeting prospective tenants or are renting a property with higher rental income, you may find the benefits of a realtor well worth the cost!