The reason why investors buy rental properties is regularly misunderstood by real estate agents new to real estate investing.

Most agents want to assume that real estate investors, like homeowners, are mostly concerned about the property’s amenities. That investment decisions, like home buying decisions, are based on such things as whether a rental property is in perfection condition, has curb appeal, or is in some particular school district; not so.

In truth, amenities play only a supporting role to what a prudent real estate investor is actually seeking--return on investment. The real reason buyers purchase rental property is for the anticipated real estate investment benefits known as the income stream, and amenities are important only in how they might affect that income stream.

If an apartment building for example were in less than stellar condition and the cost of rehabilitating that apartment didn’t offer the opportunity to increase rents enough to more than offset those costs or, contrary wise, could increase rents enough to more than offset those costs, then property condition would be a consideration to the investor. Otherwise, it’s less important.

Bear in mind that true investors are not as interested in buying a property as they are in buying the property’s income stream and therefore tend to treat the physical property as a secondary issue. Or, in the words of one of my investor customers, “Only women are beautiful,” he said, “what are the numbers.”

This is the reason why I advise real estate agents who want to successfully list and sell rental properties and gain investor-customers to prepare themselves adequately to run the numbers. The easiest way, of course, is to make the small investment in a quality real estate investment software solution, but you can also setup your own Excel spreadsheet.

The point is not to ignore the financial measures investors look for to make investment decisions. Because nothing else drives investors, they buy (and for that matter, sell) rental property based solely on the amount of money they can make. And real estate agents with that understanding are more apt to make money, too.