With the real estate market on the up and up - investors are swooping down on up and coming areas to get a piece of the pie. Working with real estate investors as an agent can be a great opportunity.
Focus On What Investors Want
Agents who work with real estate investors need to become advisors of sorts. If an agent can offer insight, guidance, and clarity - they're in. Investors want to know that they're making a smart financial decision and that their financial investment is going to pay off. What investors don't want is a property that could be problematic or is too big of a risk.
Investing in general means that a deal needs to be "smart". Simply put: the investment needs to make financial sense in the long term. So, when working with investors be sure to focus on the bottom line: cash flow.
Cash [Flow] is King
When talking investment - one thing always remains top of mind and that's cash flow. Agents who are working with real estate investors need to be ready to hear "no" quite a bit before they hear "let's do it". This is because buying an investment property can be even trickier than buying a primary residence. The emotion behind buying a home one wants to live in goes out the window - investors just want to know if the property will make them money.
So agents should make sure of the following before showing any potential properties to investors:
- Location. Is it up and coming? Is it near areas that people would want to rent?
- Rental comps throughout the area. Can a rental price that makes additional income for the investor be "easily" attained?
- List price vs. probable rental income. Will the home rent for a reasonable amount to cover the mortgage, etc.?
- Size - can the investment property have multiple tenants? Ex: a four-plex, etc.
The Bottom Line
Working with investors as an agent requires a specific skill-set and focus on what investments make sense now and later. Agents need to be sure to have a thick skin, be long-term oriented, and think outside the box. Working with those who want to invest is a great choice for agents who want to do less "personal" real estate like open houses and showings.
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