Working With A Broker
One of the most important things you will ever do is locate a broker that has knowledge and whom you can trust. Don’t just go with someone who happens to run an attractive ad in the paper. Talk to them. Ask questions. What have they sold recently? Do they understand taxes, property management, maintenance? Do they themselves own income property? To me, being a successful Real Estate Broker does not mean “just selling you property”. The most important thing is for you to be happy with what you purchase and for the property to do what you want and expect.
If all a broker does is push property at you without first getting to know your particular needs, situation, and financial capabilities, find another broker. For example, ‘income property’ can mean lots of different things. Do you want positive monthly cash flow that you can take to the bank immediately? Or simply break even cash flow, using future appreciation for your children’s college fund, your retirement, or maybe a nice vacation. How much can your investment save you in taxes against your earned income? Taxes saved is money earned. Some people who can afford it just want “pride of ownership”. The good feeling of being able to say to others, “Look at that gorgeous property I own” is more important than cash flow or tax savings.
If you presently own a property and are thinking of selling, should you sell? Maybe refinancing will accomplish your goals. What do you feel comfortable with? I try to assess what someone is comfortable doing. Your investment portfolio should NEVER keep you awake at night. The goal is to make you money, while you save on taxes and, at the same time, have some fun and excitement!
Once you have established a good rapport, your broker will probably spend many hours in research and analysis on your behalf, finding properties that suit your needs and eliminating those that don’t. This saves lots of time now, and frustration later. A good planning session, either by phone or in person, is also very important. With proper planning and analysis, you should never pay capital gains taxes, you will save taxes on your earned income (certain exclusions apply depending on your income level), you can generate cash for other purposes, and you can build a sizeable net worth for financial security. And it’s all perfectly legal!
Personalities That Work Together
Last, but certainly not least, find a knowledgeable Real Estate Broker that you like, feel comfortable with, and respect. You don’t have to like them so much that you are “best friends”, but some camaraderie is important. We all know that there are some very nice people out there with whom, for whatever reason, we just don’t hit it off. I know that I have sometimes referred a potential client to another broker just because I didn’t feel comfortable with them or they with me. You and your broker are working as a team for your benefit.