As a residential real estate broker, your job is to provide value to your investor clients. While capital is important, providing additional services to boost investors’ prospects and opportunities within the real estate investment market is how private brokers establish their brands and build lasting and profitable partnerships with clients.
Below, we’ll discuss the latest trends in real estate investing, with the tips, tools, and insights you need to help advise your investor clients:
Below, we’ll discuss the latest trends in real estate investing, with the tips, tools, and insights you need to help advise your investor clients:
Identifying the Right Real Estate Investment Market for Clients in 2024
First of all, you need to understand your client’s business plan. Are they short-term fix and flip or new build investors? Or do they plan to purchase long-term rental properties?
Determining the Right Investment Plan
With the average home price increasing 5.3% over the past year and housing affordability at an all-time low, many investors need to know which markets are profitable in today’s real estate market. They might wonder, “Should I sell or rent my investment property in 2024?”
This is a great opportunity to put your advisor hat on and provide insights into the pros and cons of renting vs. selling, including:
This is a great opportunity to put your advisor hat on and provide insights into the pros and cons of renting vs. selling, including:
Pros of Renting:
- Steady income stream
- Benefits from property appreciation
- Tax benefits
- Passive income
Cons of Renting:
- Time-consuming
- It can be confusing & there are evolving regulatory challenges
- Knowing and dealing with tenant rights, vacancy, & delinquency
- Unpredictable rental market fluctuations
Pros of Selling:
- Immediate cash
- No long-term commitment
- Higher home values in today’s market
Cons of Selling:
- No long-term appreciation
- Transaction costs (Agent commissions, closing costs, capital gains, etc.)
- Potential holding times
If your client already has certain types of real estate investments in mind, you can offer to analyze potential properties using a rent vs. sell calculator. This tool uses valuable data points, like property value estimations, rental income projects, and appreciation estimations, to determine the most profitable investment route for your client.
Identifying Profitable Investment Markets
Once an investor has a long- or short-term investment plan, it’s time to help them identify the best real estate investment markets. In reality, real estate investment market analysis is not overly difficult, with most of the necessary metrics readily available online.
Helping investor clients identify or screen potential markets ensures they have the necessary attributes to produce a high ROI in either the short- or long-term. The best real estate investment markets to buy rental properties or invest in fix-and-flip and new build projects tend to have:
Low unemployment rates: Visit local city economic development or job market websites like Indeed.
Helping investor clients identify or screen potential markets ensures they have the necessary attributes to produce a high ROI in either the short- or long-term. The best real estate investment markets to buy rental properties or invest in fix-and-flip and new build projects tend to have:
- Bustling job markets: Visit the U.S. Bureau of Labor Statistics for insights.
- Residential growth: Visit the U.S. Census Bureau for more information.
- Housing affordability: Visit real estate marketplace research websites like Zillow.
Low unemployment rates: Visit local city economic development or job market websites like Indeed.
Understanding Today’s Consumer
Experienced business professionals understand the importance of understanding the stark differences in consumers by generation. With nearly three-quarters of Gen Zers saving to purchase a home in the next six years, real estate investment market success is contingent on knowing and catering to the demographic shifts among younger homebuyers.
Here are the top 3 demographics of younger homebuyers your clients need to know before investing in a new project:
Here are the top 3 demographics of younger homebuyers your clients need to know before investing in a new project:
- A Digital Savvy Approach: Gen Z is the most digitally connected generation to date. Creating a digital journey for the homebuying experience has quickly gone from a “nice to have,” to a necessity.
- Online listings
- Social media presence
- Virtual transactions
- 3D tours
- A More Sustainable Green Living Environment: Going sustainable green has gone from a movement to a lifestyle. Socially conscious homebuyers not only want their home to express their views on sustainability but to exude natural beauty both inside and out.
With sustainable materials, players in the real estate investment market should look to implement biophilic elements (earthy tones, plants, bodies of water) and natural living designs (open concepts, natural lighting, living walls) into their fix and flip and investment rental properties.
- Emphasizing Affordability: To the latest target demographic, affordability has become the most important factor of their homebuying experience. This emphasis has flipped trends in real estate, with today’s homebuyers looking for:
- Smaller, more affordable homes.
- Homes outside of urban areas in suburban and secondary markets.
- Properties with shared living spaces like townhouses and homes with ADU units.
Acquiring Real Estate Investment Accuracy
Real estate investing is a profitable, yet challenging risky business. The most successful investors, and those with smart advisors, perform fix and flip analyses on every potential investment. A fix and flip analysis gives clients an estimate of a property’s profit and ROI potential before buying in. This improves decision-making and investment accuracy for you and your clients.
Additionally, a thorough analysis helps you and your clients:
- Determine a property’s after-repair value (ARV)
- Estimated project costs
- Identify the client’s minimum profit margin and ROI ratio
- Set a maximum allowable offer
- Plan for the unexpected
Best of all, fix and flip analysis can be performed with a little research and simple fix and formulas.
Providing Financing Speed & Flexibility
In the real estate investment market speed is often just as important as sale price. At the end of the day, providing agile and fast funding to clients will be your greatest asset.
By partnering with a reliable and flexible capital partner like Roc Capital, private lenders and third party originators mortgage brokers unlock new more potentials with more precision, speed, and opportunities to say “YES” to their investor clients. This helps them outpace the competition and succeed in any type of real estate investment market.
Roc Capital’s loan products provide you with the flexibility and speed to meet the unique needs of your clients to help them succeed in any real estate investment market. We provide:
By partnering with a reliable and flexible capital partner like Roc Capital, private lenders and third party originators mortgage brokers unlock new more potentials with more precision, speed, and opportunities to say “YES” to their investor clients. This helps them outpace the competition and succeed in any type of real estate investment market.
Roc Capital’s loan products provide you with the flexibility and speed to meet the unique needs of your clients to help them succeed in any real estate investment market. We provide:
- Fix and Flip Loans
- Ground Up Financing
- Stabilized Bridge Loans
- Single Property Rental and Rental Portfolio Loan Options
By partnering with Roc Capital and our team of industry experts, you gain the knowledge, tools, and skills necessary to help guide your clients to real estate investment success.
Ready to take your mortgage brokerage business to the next level? CLICK HERE to get started today.
Ready to take your mortgage brokerage business to the next level? CLICK HERE to get started today.
