Ever wonder how to progress on your real estate career? Are you thinking about the best clients to bring on board? Then, pairing up with real estate investors is just what you need. Career opportunities in real estate increase each year. While most real estate agents and brokers would rather work with homebuyers, others prefer to specialize in working with property investors. Both groups have their advantages and disadvantages. Below are the reasons why some prefer working with investors.
Real Estate Investors Are Not Emotionally Attached to Their Properties
Dealing with difficult clients can make the entire career of a real estate agent a nightmare. Homebuyers and sellers oftentimes get emotionally attached to their properties; they are either in search of the perfect home or they find it hard to be separated from their old home. This means that the deal can drag on and take months. On the other hand, real estate investors focus on just one thing: investments that are worth their while. As long as you find them properties that fit with their budgets and expected profits, they are willing to comply with your terms and conditions. In most cases, they are okay with just having a report on the inspection of the property; they do not even have to see them.
Deals Can Be Expedited
Property investors work very differently from homebuyers. An average homebuyer can have the problem of securing a mortgage and might be unable to pay upfront. However, once property investors find a profitable investment property, they want to move forward with the purchase. Real estate investors get access to mortgages because they can use their rental income as collateral, so lenders see them as lower risk borrowers. Additionally, real estate investors have various creative financing options, such as private money lenders, hard money lenders, syndication, crowdfunding, and partnerships.
Earn Higher Commissions with Investors
Home buyers are usually have tight budget restrictions, while investors often have less budget restrictions. This means that investors can look into buying properties at price ranges that most homebuyers will not be able to afford. Furthermore, a lucrative property yields a higher commission for you, as an agent. After all, why should you be involved in a business deal that will give you a 10% commission, when you can go for one that is willing to start off the negotiation with 20%?
Access a Large Client Pool
If you are an agent in high value markets such as San Francisco or New York, you will likely encounter challenges with having homebuyers as clients. This is because property prices in these markets are high for the average person. Moreover, the high price-to-rent ratio means that renting a property makes more sense from a financial point than owning a home. These hot markets, on the other hand, are locations where real estate investors want to purchase properties to benefit from the high demand for rentals. Moreover, markets with high demand, rental rates, and returns on investment attract real estate investors from all geographical areas, including from abroad.
Investors Are More Active Than Homebuyers
Research by the National Association of REALTORS® states that homebuyers expected to stay in the same property for 15 years; even more, 18% of homebuyers said that they never plan to move. For real estate agents, this means that you should expect to engage the same homebuyer client again in 15 years; this is only if the client is among the 82% who expects to change a home. Furthermore, you can engage this client again only if this client was satisfied with your service. On the other hand, a successful real estate investor expects to buy a new investment property every now and then. Over time, as long as you satisfy the real estate investor, you will earn commissions from the same lead.
Investment Property Analysis Tools Make It Easy to Find Profitable Rentals
While it is almost impossible to create an algorithm for the perfect property for buyers, coming up with the right investment property formula is feasible. Agents can use available rental property analysis software to meet their clients’ expectations and requirements. This includes factors such as property type, budget, location, cap rate, rental income, rental strategy, and cash-on-cash return. Thus, you can locate properties for your investor leads from the comfort of your office or even your home. With the right tools, you can provide your clients with readily available reports.
No matter your level of experience, consider specializing in working with investors rather than homebuyers. In this way, you will be able to close bigger deals faster and more frequently. If all goes well, you will be able to work with the same investors over and over again.