As buyers’ agents, it’s our role to protect our client’s interests. This might include rescuing them from poor choices, and saving them money
For anyone but those with the deepest pockets and preferably inherited wealth, a property purchase is likely to be the single-most important financial transaction of their lives, and the most costly. Even for property investors, any property purchase is still a significant undertaking, one investors need to get right. This is why many property investors rely on a buyer’s agent to help them build their property portfolio. So how can you help your property investment client save on an investment property?
1. Understand your markets
As I always say, you should be able to parachute a buyer’s agent into any area and they’ll be able to identify value for money in local properties. Perhaps your client has chosen to buy in what is being tipped as a growth suburb. Instead of looking only for properties within the chosen suburb, a good buyer’s agent will look at adjacent suburbs that will benefit from the ‘halo effect’ but be priced lower.
2. Help clients diversify
For property investors, it’s often more comfortable for them to invest in areas they know. However, buying too many new apartments in one tight area means higher risk. Additionally, those properties in currently high-performing suburbs or cities are going to be more expensive. As buyers’ agents, we should have national property figures and trends at our fingertips so we can guide clients into diversifying into other suburbs, regional cities or states where the cost of housing is lower but yields are higher.
3. Do all your due diligence
As buyers’ agents, we need to consider the goals of our property investors. They are building wealth through property; they want steady income and growth. We need to be aware of the property cycle – nationally as well as for specific markets – and any other issues like noise or topography in the vicinity. Property investors need to be confident that the property or properties you recommend don’t have known issues like pest infestation or maintenance and repair issues that will mean they need to outlay money before they can lease the property.
As property buyers, we need to ensure we protect our clients’ best interests by insisting on property and pest inspections and never buying without them. We should physically inspect the property to check for attributes that add and detract from a property; for example, proximity to an industrial estate or a busy road. It’s worth taking the time to inspect any properties you’ve identified as suitable, and preferably at different times. Saturday nights are always a good indicator of neighbour noise while weekdays give you an indication of traffic. Beware of any property whose history shows multiple tenants or owners in a short period.
4. Ensure property investors can manage risk
Even experienced property investors have a more optimistic view of their capacity to service debt should the worst happen. You need to ensure your buyers have a contingency plan and have a buffer should the property remain vacant for longer than expected due to a catastrophe. In the first few months of the pandemic, we observed panic selling by investors who were over leveraged and despaired of being able to service their debt.
5. Investigate professional finance packages
Many professionals like doctors, solicitors and accountants are eligible for professional financing packages with feature that could include:
- Higher allowed Loan to Value Ratio (LVR)
- Lower interest rate
- Discount on loan fees
Don’t assume your client is aware of these packages and make sure you’re fully informed so you’re armed with information.
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Want to up your game as a buyer’s agent? In our group,we discuss how we save our clients so we all learn from each other.
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Currently we are in a growth phase and oversubscribed with client leads. For a limited time, we have places available in this strong buyers’ agent business, with leads in Melbourne, Geelong, Bendigo and Ballarat. Call me, Miriam Sandkuhler, on 03 9988 2266 to learn more.