Investors can be excellent long-term clients for real estate agents. Instead of buying a new home every five to seven years, these professionals are likely purchasing new properties more often, sometimes even multiple homes in a single month. If they are renovating distressed properties for re-sale they may be listing homes for sale just as frequently.
Working effectively with investors can be an excellent way to carve out a niche within a crowded industry. Here are a few things to keep in mind when cultivating relationships with investors.
Identify Their Ideal Property
House hunters looking for a primary residence are often considering a wide range of options. They may have several favorite neighborhoods, be open to several price points and willing to spend a bit more for the right home. Investors might not have many must haves when it comes to specific home features such as flooring or a fenced in back yard, but they may have very detailed requirements concerning things such as price per square foot.
They are on the lookout first and foremost for homes where the numbers work, and there is a profit to be made. Take care when setting up listing notifications so they receive updates with houses they are most likely to be interested in, and don’t have to weed through lots of homes to find those with investment potential. As you work with a client over time you’ll get a better feel for what they’re looking for and refine their property searches.
Investors often are competing with other buyers also on the search for homes with income earning potential and tend to have busy schedules. When a new property comes on the market they may want to see it in a hurry. If you don’t have time to accommodate quick showings you may want to incorporate a buyers’ agent into your team so you can keep your investor clients happy.
Another plus of working with investors is that though they might want to see a new listing right away, they are generally serious buyers. They tend to make decisions quickly, and don’t waste time with showing after showing before making an offer.
Cash flow is generally a primary concern for real estate investors. Mortgage options that allow them to save more funds for the next project can be particularly attractive to these buyers. When you work with a lender with access to a full suite of investor friendly programs you can provide exceptional value. Some of the products that may work well for a rental property are:
- Low down payment home loans
- Renovation loans where the cost of repairs or updates can be financed into the first mortgage
Again, it all comes down to the numbers. In order for a transaction to make sense, the investor must be able to make a profit on renting the property or reselling it. While you of course don’t have a crystal ball and can’t promise that a home will rent or sell for a specific number, you can provide data that will help your client make informed decisions. Data such as the following will be of particular interest to investors:
- Average sales price per square foot for similar properties in recent months
- Average days on market
- Current rental prices
Providing an exceptional experience for your investor clients can go a long way towards growing business in this profitable segment of the market.
Photography by [88studio] © Shutterstock.com
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