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As a real estate agent, you likely work with clients who are looking to buy a home for different reasons. Some are looking for a primary residence, while others are looking for an investment property. While both types of clients are in the market to purchase a property, their needs, goals, and motivations can be quite different. In this short guide, we'll explore those key differences and provide some easy tips to help you better serve each group.
When working with clients looking for a primary residence, your primary focus is to find a home that meets their needs and fits within their budget. These clients are typically looking for a place to call home, raise a family, and build memories. They may be more focused on the size and location of the property, the quality of the schools in the area, and the overall livability of the home.
Clients looking for investment properties are typically more focused on the financial aspects of the transaction. For them, a purchase is about the math, not the emotion, and they're looking for a property that can generate a return on their investment either through rental income, appreciation, or both. As their agent, your role is to help them identify properties that meet their investment criteria and provide guidance on the financial aspects of the transaction.
When looking for a rental property, real estate investors will be interested in several metrics that will help them determine if the investment is profitable. These metrics include gross yield, cap rate, cash-on-cash return, occupancy rate, and rental income growth rate.
You can read more about these metrics elsewhere in our blog.
The expertise of a local real estate agent is invaluable to an investor who is considering properties in markets outside of their own home market. You can provide first-hand knowledge about local market conditions and deeper insight and context when it comes to key metrics like average rental rates, vacancy rates, and property values. You can also help identify properties that meet your client's more subjective investment criteria, like finding properties in desirable neighborhoods with good school districts and with proximity to points of interest or other amenities that appeal to residents.
As you help your client evaluate potential properties, you'll want to provide up-to-the-minute local market data, including recent sales data, property tax information, and rental data—all of which is easy to access in the Picket platform. And of course be prepared to serve as your client's eyes, ears, and advocate during inspections and negotiations when the time comes.
Ultimately, all real estate is local, even if the buyer is out of town. By providing local market insights, analysis, and support, you can help your investor clients evaluate potential properties quickly and then make informed investment decisions that build trust in your services. And by understanding what makes an investor a special kind of client, you can provide tailored support that answers their needs and helps you build a successful real estate business for the long-term.
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