You or your property brokerage firm may have years of experience working with standard home-buying clients. But “investors” – your experience in that may be rare or zero.
It’s not just you, according to the National Association of Realtors (NAR) 2022 report, only 12% of buyers Realtors helped in purchasing a property were investors.
Don’t get us wrong, there is nothing bad in focusing on homebuyers. However, your property brokerage firm can also consider working with real estate investors to better grow and thrive your business.
Unlike regular homeowners who only shop for a home every 15 years or so, real estate investors are always on the lookout for their next deal. This means a great source of repeat business for your real estate brokerage.
Scroll down below to unveil more pros and a few cons of working with a real estate investing client. This will help you better decide if focusing on investing clients is something your real estate business must prioritize. Let’s begin!
Upsides and Downsides of Working with Real Estate Investing Clients
PROS –
- The Mississauga Housing Market Sees More Action from Investors than Homebuyers
According to a NAR Report, homebuyers live in the same property for a median of 15 years or more while 18% plan on living in a home forever. This means after your real estate brokerage in Mississauga helps a home-buying client settle in a home, you can expect to have them as a client again in 15 years.
Remember, this can only happen when your real estate team places time and effort into keeping a good connection with your past client.
However, an established real estate investor buys a new property every two to three years or even one year. So, as long as you can offer the best services to a real estate investing client, you can expect to earn a commission from the same lead every two to three years.
- Earn Not Just a Regular Commission, but a High Commission
So, now you know that your real estate brokerage has the potential to earn regular commissions by working with an investing client. But that’s not just it; real estate professionals can also earn a high commission by working with an investor.
This is because homebuyers usually have a tight budget, especially first-time homebuyers. However, investors have fewer restrictions in this regard. They have more capital on their own as well as more financing options. A more expensive property translates into a higher commission for you and your brokerage firm.
- Investors Typically Have Few Demands and Preferences Regarding Properties
Homebuyers are very picky when it comes to finding a property, and that’s understandable! After all, they have to live in the same house for at least 15 years or more.
This is why they have to ensure that the property, along with the location they are settling in matches their family’s needs, preferences, and lifestyle. So, for a real estate brokerage in Mississauga, a single deal with a homebuyer can take months, from finding a home to the closing process.
However, real estate investors do not have many wants and whims when it comes to an investment property. They just want one thing from a property in Mississauga – a high return on investment. Hence, as long as your property brokerage firm can find them a property that matches their budget and expected return, they will be willing to buy.
Many investors do not even care to see the investment property if the home inspection report shows no issues and the investment analysis points towards a high cash-on-cash return. All this means less stress and hassle for your real estate team.
- Can Swiftly Seal Deals Without Facing Major Financial Obstacles or Hurdles
When a real estate brokerage works with home buyers or sellers, deals usually take longer to close. Apart from having to show buyers more properties, homebuyers have difficulties in getting a mortgage.
However, the situation is totally different when it comes to real estate investors. Once investors find a property with a high return on investment, they can readily move forward with the deal.
The reason for this is that lenders are more willing to give a loan to a property investor than a homebuyer in Mississauga. Investors usually have a diversified portfolio and a steady stream of income from existing investment properties, making them less risky borrowers.
Secondly, real estate investors have access to different types of financing options in Mississauga. This includes but is not limited to – hard money lenders, private lenders, crowdfunding, and partnerships. This is something homebuyers do not have at their disposal.
- Tap into a Vast Client Network to Boost Your Real Estate Business
From 2024 to 2030, the global real estate market is expected to grow at a CAGR of 5.8%. This expansion could attract more investors looking for high returns in the real estate industry.
If and when that happens, remember that the Mississauga housing market will remain the hotspot for investors. Situated within the Greater Toronto Area, Mississauga offers proximity to Toronto’s job market and amenities while often having more affordable houses for sale than Toronto. So, by starting your journey with one or two investing clients in 2024, your real estate brokerage in Mississauga will be able to build a larger client pool down the line.
Also, just like homebuyers and sellers, real estate investors can earn you valuable referrals. A satisfied investing client may refer your business name to other investment groups, property management firms, or high-profile clients.
CONS –
- Meeting the Fast Deadlines Set by Investors Can Be Challenging at Times
Real estate investors often have a shorter timeline when it comes to buying a property. They have specific investment targets or deadlines to meet such as portfolio diversification, tax considerations or meeting financial milestones.
So, by working with an investor, your real estate brokerage team may be sourced to find multiple properties within a short time. And remember, you need to do this by ensuring each property deal is lucrative.
- Brace Up to Work in a Challenging and Competitive Housing Market
Real estate investors often prefer to buy properties in a highly competitive market – where there are many buyers and where properties have a high demand. In such bustling neighbourhoods in Mississauga, properties get snatched up quickly.
So, unless your real estate brokerage in Mississauga has experience working in such a challenging environment, things may get a bit difficult for you. You will have to employ strategic tactics to make your investing client stand out among rival homebuyers.
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Become the Top Pick for Property Investors Looking for a Brokerage Firm in Mississauga
All set to work with all-cash buyers who scoop up multiple properties a year and close deals fast? Then, start hunting for real estate investing clients TODAY! You can work with these investing clients alongside home buying and selling clients to grow and thrive your real estate business further.
However, make sure before you partner with investing clients, your real estate brokerage team must have adequate knowledge about the real estate investment market. By doing this, your team can provide adequate knowledge and support to investors and become the go-to brokerage for them in Mississauga.
