Real estate advisors provide research, analysis, planning, strategy and management input when evaluating, acquiring, selling, developing, improving and financing the real estate portion of an investment portfolio. Because real estate investing can be so high-stakes, the services of one of these professionals can really come in handy. Real estate advisors may even work with your financial advisor to help guide your real estate investing activities and supplement the transaction-oriented activities of real estate agents and brokers.
What Does a Real Estate Advisor Do?
Real estate advisors do work that is outside the kind of services typically provided by agents and brokers. Rather than focusing bringing together buyers and sellers and marketing of properties, advisors typically look at how their clients can maximize the value of real estate investments that are already in the portfolio or may be added.
Some of the services real estate advisors provide can include:
- Research properties offered for sale
- Evaluate market conditions
- Check zoning requirements
- Assess proposed acquisitions
- Craft capital allocation strategies
- Study the feasibility of renovation projects
- Create strategies for operational improvements
- Study ways to improve tenant satisfaction
- Balancing lease-purchase decisions
Generally, a real estate advisor seeks to provide an objective, informed viewpoint to help a real estate investor achieve the best returns on the assets. For example, an advisor may help a client evaluate tenant retention issues with an income-producing property in the client’s portfolio. Then the advisor could make recommendations improving amenities, expanding parking, fine-tuning operations, increasing maintenance or other methods for enhancing retention.
How Do Real Estate Advisors Get Paid?
Real estate advisors typically charge hourly fees for their services. Generally speaking, real estate advisor charges usually range from $75 to $150 per hour. Advisors may also charge a flat rate for a specific service. For instance, they may set a flat fee for performing a market analysis of a particular property.
Advisors may in some cases get part of their compensation from commissions on real estate transactions. These fees, similar to those charged by agents and brokers, will be based on a percentage of the sale price of a piece of property.
Real Estate Advisor Qualifications
Real estate advisors may be agents or brokers who have chosen to devote themselves more to the advisory side of the business than to the transactional side. They may also come from the ranks of appraisers, attorneys, financiers, asset managers and others, including long-time real estate investors.
Real estate advisors don’t need special occupational or professional licenses, although they may be licensed real estate agents. Real estate advisors may have one or more designations that indicate some level of professional recognition or training.
The Counselors of Real Estate is a professional organization of real estate advisors whose members carry the Counselor of Real Estate (CRE) credential. The Chicago-based organization has approximately 1,000 members. Advisors with at least 10 years of experience can apply to join. They also agree to follow a code of ethics.
The Accredited Consultant in Real Estate (ACRE) is a certificate available to real estate practitioners who complete a two-part educational curriculum. ACRE certificate holders are not necessarily focused on advising clients on real estate as an investment. However, they do offer services on a fee basis rather than strictly by commission as more traditional real estate agents and brokers do.
Real Estate Advisors vs. Agents and Brokers
Many real estate advisors are licensed real estate agents or brokers. While some advisors may act as agents or brokers to assist clients in listing, selling and buying real estate properties, arranging a mortgage, for investment, their emphasis is on the non-transactional side of the business. As a result, clients of real estate advisors often also are represented by agents or brokers in transactions.
Advisors are likely be compensated differently from agents and brokers. Advisors typically charge hourly fees or flat fees for their services. Agents and brokers are usually paid only through commissions on real estate transactions. Keep in mind that there are different types of agents for different roles. For instance, buyers’ agents specialize in representing buyers, while sellers’ agents are experts at supporting sellers’ interests.
Real estate advisors can help make sure real estate investments perform up to their potential. Rather than providing primarily transactional services like most real estate agents and brokers do, they emphasize research, analysis, planning, strategy, financing and similar concerns. Real estate advisors generally work with other real estate professionals, including agents and brokers, as well as financial advisors as part of an investor’s team.
Real Estate Investment Tips
- Crafting a balanced investment portfolio that includes real estate can be difficult to do on your own. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Use SmartAsset’s mortgage comparison tool to compare mortgage rates for your upcoming real estate investments. You’ll find options from top lenders, allowing you to pick the one that best suits your needs.
Photo credit: ©iStock.com/Bet_Noire, ©iStock.com/izusek, ©iStock.com/kate_sept2004