David Parnes and James Harris of “Million Dollar Listing LA” share their secrets for success in helping investors in the shifting market. It will take thoughtful and savvy moves to keep investors purchasing into 2023.
New markets require new approaches and tactics. Experts and industry leaders take the stage at Inman Connect New York in January to help navigate the market shift — and prepare for the next one. Meet the moment and join us. Register here.
Savvy investors looking to put their money into a reliable asset know real estate is a viable option, even in volatile markets—and they need a savvy real estate agent on their side. You have the opportunity to shine as a resource and cater to them by shifting your mindset slightly and focusing on a few areas of your business. Here’s what investors need in an agent right now:
An understanding of the rental (and vacation rental) market
For investors looking to buy a property and rent it out to long-term renters or vacation-goers, an understanding of the ins and outs of the local rental market is crucial. Every city has its own rules and regulations around rentals, particularly when it comes to Airbnb and similar vacation rentals.
Buyers need to work with an agent who can advise them as to whether the city will allow them to do what they want with the property. This should be one of the first topics of conversation: How they want to leverage an investment property and if that is feasible given the local restrictions.
They may need to turn their sights to a different location if their goals won’t be met in a particular city.
Even within a city, each neighborhood has its own charm. Buyers will likely want to buy in an area that is renter-friendly, perhaps with other rentals nearby. They may also want to prioritize the local attractions and conveniences, such as nearby parks, restaurants, shopping, airports, schools and so on. The better the location they can find, the more attractive their investment property will be to renters.
Reliable property management resources and contractors
Often when an investor buys a property, they don’t want to handle the details of renting themselves; they want a property manager who can deal with the logistics. As an agent catering to investors, having a great network of vendors is huge — people they can immediately connect with and arrange for anything from repairs and maintenance to cleaning and lease agreements.
Complete transparency and clear communication
Those embarking on buying an investment property are likely busy people who need a concierge approach to the transaction. To-the-point, honest and efficient. They probably aren’t purchasing a home because of the original details or architectural significance; they’re most likely prioritizing things like location, condition and income potential.
This a business transaction, and that requires a slightly different tone and approach than a typical residential sale.
The numbers in their back pocket
For investors looking to profit off a property, having local comps, statistics and information about trends at the ready are vital in order for the buyer to feel confident that they will indeed be coming out on top, at least in the long run. Do your research before meeting and have a sense of what kind of house and where will be the most profitable, based on the numbers.
Comfort with handling the transaction remotely
Often, investors are buying a home in a different state or country, so having a tech-savvy agent who feels comfortable setting up remote meetings and touring the property for them is important. Get a sense of how they best like to communicate — whether it be by text, email, phone calls, Zoom or FaceTime — and cater to their preferences to deliver the best experience for them.
Knowledge about local emerging markets
The best investment happens when purchasing a home inexpensively and then having that home grow in value, even without improvements made. The agent who has their finger on the pulse of the local market is a huge benefit for investors.
Ideally, you can advise clients on neighborhoods, and even streets, that aren’t booming yet, but likely will be in the near future. Consider what businesses — especially large businesses and tech companies — are moving into the area. Jobs will come with them, as well as higher demand for housing and increased prices.
Agents also need to weigh in on any short and long-term policies and restrictions in each ZIP code. Keep up to date with local legislation and the latest information about rentals in your market to keep your clients informed.
Think strategically, be prepared and have local knowledge dialed in. Helping an investor find that property — and seeing it grow in value over the years — is a great feeling. Nail it, and they’ll likely be coming back for their next purchase as they expand their portfolio.