Tips for working with investors
There are a number of advantages and rewards to be had from agent-investor relationships.
Property investors can be a very profitable market segment for agents, as they require less hand-holding than typical owner-occupiers and first home buyers. Most commonly investors aren’t looking for homes to live in for themselves so they tend to not be as particular or as hesitant to make a purchase as an owner-occupier can be.
Investors also have greater potential to be repeat customers over a short amount of time, often buying and selling multiple properties within a year and also needing property management services for their rental properties.
Four tips to help you best service investor clients:
1. Understand what investors are looking for.
Get yourself into the mindset of an investor and think about how they assess the worth of a property and how you can be of the most help to them. Unless you take time out to understand how they make purchase decisions you will not be able to give the best advice and knowledge on investment prospects. You need to have a different approach depending on the type of investor you’re working with.
The house flipper- For those investors looking for old run-down properties they can buy at a low cost and fix up and sell for a profit you need to learn about the different stages and timeline of a typical ‘fix and flip’. You also need to have knowledge about what newly renovated homes in the area have been selling for (to determine if and how much profit is achievable) and what the typical buyer in that area looks like (it may be a rental property investor or a young first home buyer family). This will help you to advise house flipping investors about the changes that will add the most value.
Rental home investors- For this type of investor price and stats are paramount. You will need to know your local rental and investment market inside and out. What type of properties command higher rents? What areas have the highest rental demand? What is the area’s median house price/ long-term capital growth/ rental yield rate? Learn how to do cash-flow calculations to show clients that after the mortgage and other property related expenses, how much rental income they can expect to have coming in from a particular investment property.
2. Stay informed on markets of interest.
One of the best ways to help out an investor is to fuel their desire for market knowledge and up to date market information. Set up automated email alerts to inform your investor clients about new and sold listings of their preferred house types in their suburbs of interest. The best thing about email alerts is that they are easy to set up, automatically go out and every time they get a new alert they’re reminded of your services and value.
3. Realise investors are valuable because they tend to make quick decisions.
Unlike first and second home buyers, who depend on your real estate experience, knowledge and emotional support as they grapple with their purchase decisions calling at all hours with questions and concerns, investor clients tend to be a bit more market savvy, know precisely what they want and what they’ll pay for it. Consequently, transactions with investors tend to be simpler than those with owner occupiers. Where once you gather all the information the investor needs they’re typically able to make an immediate decision then and there if it meets their specific requirements and investment goals.
4. Talk investor to investor.
If you’re an investor yourself or you’ve worked with a lot of other investors before let your clients know and talk about the types of results you’ve seen. This will show them that you know what you’re talking about, that you’re on the same page and that you understand how negotiating and low offers are a part of the property investing game.
Also keep in mind for investors time is money, so you should always try to respond to calls or emails within a couple of hours of receiving them. Investors value speed and efficiency highly in their agents in order to snap up the best deals, and will see it as a bad sign if an agent takes over a day to return a call, as this could be the difference between having an offer accepted or missing out.