Agent Advisor Blog


Read about the latest market trends, see unique listings, and get tips and advice for selling Australian real estate.

Viewing entries tagged
Investors advice

Tips for working with investors

Comment

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. 

investors stock image

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.

 

Happy selling!

From the Homely Team

 

About Homely:

Homely is a new way to search for real estate for sale and properties to rent in Melbourne and across Australia. With over 330K listings and 500K local reviews and insights, Homely is a faster and easier way to search for property to buy and rent in Australia.

Check out our suburb reviews and Q&A pages to see what everyone is talking about!

 

We'd like to hear from you!

If you enjoyed this blog leave a comment below and share it with your friends. Please respect the public forum and refrain from posting any expletives or hateful comments as they will be removed. We're always on the look out for guest bloggers and would like to receive your feedback, so feel free to get in touch at marketing@homely.com.au.

Comment

10 Sydney hotspots to recommend to investors in 2016

Comment

10 Sydney hotspots to recommend to investors in 2016

The NSW excerpt from the 2016 January Market Report on Your Investment Property Mag says that ‘there’s no doubt that Sydney has been the capital growth performer over the last two years’ having undergone an 'economic renaissance' of runaway capital growth.

Tim Lawless, director of CoreLogic RP Data, reports that Sydney property prices have increased by 49.6 per cent since 2012, a boom by anyone’s measure.

If your clients are concerned about buying or investing in Sydney fearing this rapid rate of growth may wane in due course, AMP’s Shane Oliver offers some reassurance stating that ‘Sydney is resilient; it’s set to remain as the strongest performing state economically, with strong immigration flows’ and assuming interest rates remain low.

So if you have clients keen to get into the Sydney property market or want to add to their investment portfolio in 2016 here are 10 hot Sydney real estate markets, their key stats and major drawcards to recommend to investors.

Depending on your client's personal investment strategy we’ve divided up our top Sydney suburbs worth watching based on:

  • areas with solid rental yields for clients looking for income producing properties,
  • suburbs with high capital growth rates for investors looking for strong prospects for price growth in the long-term
  • and affordability, for investors looking to snap up a bargain in up and coming neighbourhoods.

The statistics presented, including median house price (MHP), average annual capital growth rate (CGR) and rental yield (RY), are from CoreLogic RP data accessible via Your Investment Property's Suburb Profile Reports.

10 hot Sydney real estate markets for investment in 2016:

Solid rental yield

Forestville

Stats: $1.34 million MHP, 7.23% CGR and 3.29% RY.

Drawcards: Family-friendly, great schools, public transport (buses), close to the beach, parks and rec, a safe and peaceful area.

Tempe

Stats: $971,000 MHP, 7.29% CGR and 3.37% RY.

Drawcards: Close to Newtown and Sydney University, 10km from the CBD and high rental demand, great for couples, singles and families. 

High capital growth

Thornleigh

Stats: $1.152 million MHP, 8.24% CGR and 2.71% RY.

Drawcards: 26km from the CBD, good proximity to schools, public transport, family-friendly, also good for professionals, singles and retirees. 

Parramatta

Stats: $1.09 million MHP, 10.72% CGR and 2.34% RY.

Drawcards: high rental demand, 24km from the CBD, young up and coming area, residents have an average age of 30, great for sport fans, shopping, cinemas, farmers' market, cafes, restaurants and public transport. 

Kingsford

Stats: $1.8 million MHP, 9.71% CGR and 2.31% RY.

Drawcards: Soon to have light rail services, close to UNSW and the beach, good medical facilities, suited to young professionals and families.

Asquith

Stats: $1.129 million MHP, 9.41% CGR and 2.76% RY.

Drawcards: Approx 30km from CBD, good for parks and rec, peaceful and safe, good area for retirees, professionals, singles, families and students.

Dulwich Hill

Stats: $1.3 million MHP, 8.85% CGR and 2.88% RY.

Drawcards: 10km from the CBD, great public transport (light rail, train and buses), close to Merrickville and Cooks River, family-friendly, popular with young singles, good shopping, schools, medical facilities, restaurants and cafe culture. 

Affordability

Kingswood

Stats: $471,000 MHP, 2.57% CGR and NA RY.

Drawcards: Public transport (train station), peaceful and quiet area, close to the UWS campus, Nepean Hospital, good shopping options, schools, suited to students, families and professionals.

Ambarvale

Stats: $484,000 MHP, 5.81% CGR and 4.19% RY.

Drawcards: Gyms, fitness, parks, shopping, childcare, public transport, medical facilities, suited to families, professionals, singles, students and retirees.

Potts Point

Stats: $590,000 median unit price, 5.06% CGR and 4.41% RY.

Drawcards: 3km to CBD, great waterfront views, cafe culture, nightlife, suited to professionals, singles and students, good public transport (train, bus and ferry access).

Do you have any other hot up and coming areas in Sydney to recommend for investment in 2016? Please share them below.

 

Happy selling!

From the Homely Team

 

About Homely:

Homely is a new way to search for real estate for sale and properties to rent in Sydney and across Australia. With over 330K listings and 500K local reviews and insights, Homely is a faster and easier way to search for property to buy and rent in Australia.

Check out our suburb reviews and Q&A pages to see what everyone is talking about!

 

We'd like to hear from you!

If you enjoyed this blog leave a comment below and share it with your friends. Please respect the public forum and refrain from posting any expletives or hateful comments as they will be removed. We're always on the look out for guest bloggers and would like to receive your feedback, so feel free to get in touch at marketing@homely.com.au.

Comment

Ask Rocky & Rob

Comment

Ask Rocky & Rob

Q: What are the key points to highlight when selling to an investor?

A: There are potentially three different kinds of investors you will come across and each will have different needs and criteria when looking to buy an investment property. Here are some of the key points to emphasise for each type of buyer.

1. Long-term investors

With a long term investor the vital selling point is return on investment (ROI). If they are planning on holding on to the property for years to come they will want to be assured that its probable gross yield will be worth it in the long haul. 

One good indicator of a property’s potential to have a high ROI is to calculate its gross rental yield to illustrate how much cash the property will produce annually as a percentage of its value. This provides an easy way for your investor to draw comparisons between the yield values of several investment properties they are considering [remember gross rental yield= annual rental income (weekly rental income x 52)/ property value x 100].

A second attribute to highlight for long-term investors is the key tax benefits available to property investors. Tax benefits property investors can claim as a deduction from their overall income include negative gearing, deductable costs and depreciation.

2. Short-term investors

A short-term investor is more likely to be interested in capital growth rates, where they are looking for a property that will put them in a better position financially in the short to medium term.

A purchase that provides a capital growth of between seven and ten per cent is key for an investor to build long-term wealth. So, when the time comes to sell they want to know that they are likely to be able to make a profit on what they originally paid for the property.

When selling to a short-term investor look in areas that are in demand and have a low price point. Vacancy rates and auction clearance rates are good indicators of whether a suburb is in demand or not.

When talking about the area and why the property has the potential to appreciate in value allude to the reasons good capital growth is likely down the track. Such as having access to important amenities like public transport, hospitals, shops, cafes, schools and an upward trend in land value over time.

3. The ‘Rentvestor’

This new generation of first homebuyers, aka ‘rentvestors’, are looking for affordable investment properties in growing outer suburbs or even in some cases interstate, and continuing to rent where they want to live due to lifestyle or financial factors.

This can be the best option for younger buyers to get their foot in the door of the property market and a wise way to build up equity for say two to three years that will help to build an investment portfolio and purchase a home where they want to live in the future.

These buyers will want to know about the general rental appeal of the area, whether it will be easy to rent out and find reliable tenants, and if it is close to public transport or if there are plans for future infrastructure to go in.

Also, remind a ‘rentvestor’ they are making a good choice in terms of the tax savings to be had, where the interest payments on their investment property are tax deductable along with any property related expenses incurred.     

 

If you have any questions for Rocky and Rob please send them to marketing@homely.com.au.

 

Happy selling!

From the Homely Team.

 

Blogger bios:

Rocky Bartolotto is the National Sales Director at Homely.com.au and works closely with real estate groups in Australia, tasked with building strategic partnerships and growth. Connect with Rocky on Twitter and LinkedIn.

Rocky.png

 

As the NSW Sales Manager for Homely.com.au, Rob Trovato focuses on building relationships and partnerships with real estate groups across all of NSW. Connect with Rob on Twitter and LinkedIn.

rob


Comment