Investing in rental real estate can be an excellent way to generate passive income and build long-term wealth. However, finding the right rental property to purchase is a crucial first step. Investors should leverage several valuable resources to locate promising rental investment opportunities.
This post will explore the various online and offline resources and provide actionable tips to utilize each source more effectively.
A little heads up… We apologize to our non-US readers if this article leans heavily on US examples and phrases. We hope it’s still helpful to everyone, no matter where you’re reading from!
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Take Advantage of Major Online Listing Platforms
Network with Local Real Estate Agents Specializing in Investment Properties
Leverage Property Management Company and Landlord Networks
Search Listings from Multifamily and Commercial Brokers for Larger Properties
Network Through Real Estate Investment Clubs and Meetup Groups
Implement “Driving for Dollars” Tours Through Target Neighborhoods
Send Direct Mail Campaigns to Absentee Owners in Desired Markets
Follow Economic and Demographic Trends Impacting Future Rental Demand
Key Takeaways
Frequently Asked Questions
Take Advantage of Major Online Listing Platforms
Popular real estate listing portals like Zillow, Redfin or Apartments.comprovide access to a large database of rental properties. These sites allow users to search by location, property type, price range, number of bedrooms/bathrooms, and many other filters.
Beyond the basic listing details, these national listing platforms also provide helpful information like:
- Estimated property valuation and rent potential
- School ratings, crime stats, and other neighborhood amenities
- Interior and exterior photos, plus 3D tours on some listings
- Mortgage info and payment calculators
As a starting point in the rental property search process, investors should thoroughly review listings on these major portals covering different cities, states, or regions being considered. Create saved searches with email alerts for new listings matching your investment criteria. Check these sites frequently, as inventory is constantly changing.
While listings provide a broad overview of what’s available on the market, other off-market or “coming soon” rentals may not be adequately represented on these platforms. So, casting a wider net using additional resources is key.
Network with Local Real Estate Agents Specializing in Investment Properties
One of the best additional sources to tap is real estate agents who specifically focus on investment properties because:
- They will have their finger on the pulse of the local rental market.
- Experienced rental investment agents often gain access to exclusive inventory that hasn’t even hit the major listing sites yet.
- They develop relationships with landlords and property managers looking to sell or know others interested in selling. Investors working with the right agent may get early notice of properties perfectly matching their buying criteria.
- They understand investment analysis, like cap rates, cash flow, appreciation potential, etc.
- They are knowledgeable regarding the landlord-tenant landscape in different neighborhoods, property taxes, and other key factors for that market.
- A skilled investment agent will continuously analyze their farm area and reach out to investors with new off-market or coming soon listings that may be a potential fit.
- They can also tap their network of investor-friendly agents representing motivated sellers looking to liquidate rental properties. This inside access is extremely valuable.
Leverage Property Management Company and Landlord Networks
Property management companies can also be an untapped source. Property managers interact with numerous landlords while they may not have rentals within their current portfolio. Through day-to-day operations, they gain first-hand knowledge of which owners may be motivated to sell for various reasons. Maybe a property no longer makes sense for a landlord’s current investment strategy, or they inherited a building and are not interested in the hassles of ongoing management.
Property managers field calls from these owners and can refer them to an investor client looking for inventory. Even if a sale is not imminent, planting the seed that an investor seeks properties could lead to a future opportunity.
Ask property management companies to keep you in mind as a buyer if they come across landlords interested in selling. Offer to interview as a potential new client so they can evaluate working with you and gain confidence in making referrals.
Some property managers proactively maintain more formal referral networks of investors and sellers who have expressed general interest in buying or selling. Tapping into these landlord networks can again provide access to situations not widely marketed.
Search Listings from Multifamily and Commercial Brokers for Larger Properties
Investors looking to acquire larger rental properties, like apartment buildings, multi-unit complexes or mixed-use commercial, must connect with specialized brokers. Major multifamily and commercial brokerages represent sellers of properties with anywhere from 4 units up to hundreds of units. Their business model centers on marketing this larger inventory to qualified buyers.
Working with a couple of the most prominent apartment brokers in your target geography should give exposure to this segment of the market. Some specialize in certain product types such as Class A high rises vs affordable housing. Others focus solely on a specific city or region.
Multifamily brokers also frequently represent portfolios of assets an investor may be liquidating across different metros. This can provide opportunities to pick up multiple stabilized rentals in one bundled transaction.
The commercial side sees a lot of mixed-use retail and office spaces with residential rental components, which can make solid investments supported by the other uses. Leverage broker open house events, virtual deal rooms, and market reports these firms provide to find larger rental properties available through their listings.
Network Through Real Estate Investment Clubs and Meetup Groups
Connecting with other real estate investors in your local area can provide networking opportunities to find potential off-market deals. Real estate investment clubs have been around for decades for investors to share knowledge and resources. Club meetings regularly feature experienced investors presenting on topics or providing deal analysis.
Participants range from new investors trying to connect with sophisticated landlords with large portfolios. Some may plan to sell assets and would welcome discussing it further with a trusted group member. Also, a newer trend in the field is the emergence of real estate investor meetup groups, organized locally through sites like Meetup.com. Like clubs, these meetups involve educational discussions on real estate investing strategies and topics.
The social element and in-person networking provide chances to cultivate relationships with other investors who may alert you to deals they come across that don’t work for them but may match your criteria.
Implement “Driving for Dollars” Tours Through Target Neighborhoods
Performing diligent “driving for dollars” tours through promising neighborhoods is a proven hands-on approach by seasoned investors. The concept involves:
- Selecting geographic farm areas showing indicators of future high-growth rental markets through demographic trends and housing data.
- Then thoroughly, driving each target area block-by-block to look for properties that show signs of being rentals, such as “For Rent” signs posted on the property.
- Looking for buildings that appear neglected, have visible deferred maintenance, or have other signs of distress: peeling paint, worn interiors, and overgrown landscaping.
When a possible rental property needing rehab or upgrades is identified:
- Note the address.
- Follow up by looking up the owner and sending a friendly introductory letter.
- Explain you’re an investor who buys rental properties.
- Let them know they can reach out to you should they have any interest in selling.
The time consumption sign uncovers landlords who may already be considering their rental property but haven’t yet listed it openly. An investor can negotiate a purchase directly with the owner by getting ahead of the competition.
Driving for dollars works because it proactively targets specific areas with strong renter demand fundamentals rather than waiting and competing for whatever random listings become available.
Send Direct Mail Campaigns to Absentee Owners in Desired Markets
Technology now allows investors to scale the driving for driving-for-dollar through direct mail campaigns. Instead of physically touring streets, they target sellers based on parameters like owning rental properties and being out of state.
Begin by researching county tax assessor records to identify all absentee owners of single-family rentals, small multifamily properties, or other potential investment types in your ideal neighborhood or city.
Online property data providers, like ListSource, Zillow, or realtor.com in the US, offer owner information and allow filtering by criteria, such as absentee status, property type, number of units, assessed value, and more. With this filtered list, you can create a professional-looking mailer with key details on the types of rental investments you acquire. Include your contact information and website for sellers to reach out.
You can also seek services from professionals to handle everything from printing and mailing your investor letters at scale to tracking results over time. These mailers might spark conversations among owners who were not actively marketing their rentals previously. Following up quickly is key to building rapport with motivated sellers.
Follow Economic and Demographic Trends Impacting Future Rental Demand
Keeping a pulse on broader economic and demographic trends provides perspective on emerging real estate markets likely to see increased rental demand. As an example, regions experiencing major corporate expansion and an influx of new jobs in a certain sector will require adequate, affordable housing stock for the workers relocating there. Markets enjoying population growth, a thriving job market across multiple industries, and rising wages indicate strong fundamentals. These tailwinds normally translate to higher rents and tighter vacancy rates as competition for housing intensifies.
Monitoring key factors, such as a revitalized downtown, new tech hub, or popular outdoor recreational activities, spotlights locations where buying rentals could be lucrative over the long term. It can also attract new residents to the area.
Some tools provide a wealth of data on population growth, migration patterns, income levels, employment stats, etc. Zooming into census tract levels shows micro-trends influencing specific neighborhoods.
Economic development organizations in cities or regions also issue market reports highlighting major developments and forecast projections. These give color to dynamics supporting a potential emerging rental hot spot.
Furthermore, business and local news outlets spotlight big projects underway, like corporate relocations that attract new renters.
Researching the fundamentals of drawing residents to an area and timing investments to get ahead of the curve leads to real properties with strong, sustainable tenant demand.
Key Takeaways
- Leverage major listing platforms to search available rental investments nationwide with robust filtering capabilities.
- Network with local real estate agents specializing in investment properties to access off-market inventory before hitting the big sites.
- Connect with property managers who interact with numerous landlords, some of whom may be motivated to sell.
- Search multifamily and commercial brokers for larger apartment, mixed-use, and multi-unit listings.
- Attend real estate investment club meetings and investor meetups to build relationships that could uncover deals.
- Try driving-for-dollars tours and direct mail campaigns to identify and contact absentee rental owners in target markets proactively.
- Follow economic trends, job growth, and demographic shifts to determine emerging rental markets with upside. Cast a wide net using these varied techniques to secure properties in high-demand areas.
Frequently Asked Questions
How do you find a good real estate agent for rental properties?
Seek out agents who specialize in investment real estate sales. They should understand cap rates, cash flow, landlord-tenant laws, and other key factors investors analyze. Ask for referrals from other investors. Search sites to find agents popular with landlords in your area.
What information do property managers have that helps investors?
Property managers work closely with landlords in their market. They may know owners interested in selling rentals even if they are not publicly listed. Establish rapport with property managers and let them know you want to buy. They can also provide a valuable source of insider landlord information.
Should real estate investors join a club or meetup group?
Investment clubs and meetups allow networking with fellow real estate investors in your area. Be open about your investing goals. Fellow members may share tips on promising areas or assets that are not the right fit for them but could work for you. The community provides mutual support, education, and potential deal flow.
What are the steps for “driving for dollars” to find rentals?
Select promising neighborhoods, then drive each block looking for “For Rent” signs or distressed properties. Note down addresses, look up the owners, and send a friendly intro letter expressing potential buying interest. Driving for dollars also uncovers landlords already considering selling but not openly marketed yet. Follow up persistently.
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