Property investors rode a wild wave during the pandemic, with the short-term rental market stopping, then restarting, and property prices in many second home markets soaring. What does the future hold for new second-home owners and for managers of more robust property portfolios? We’ll explore that and more, all May long, at Inman.
Last week, we reached out to you — agents and brokers who work routinely with investors — and asked you to chime in with some tips you’re sharing with your clients in this market. How are you making sure investors are taking the right steps, making the right calls and setting themselves up for success today?
From planning with a clear end goal in mind to getting educated on local and state laws, here are the tips and advice you’re offering your investor clients today. (Have more advice to share? We invite you to express your thoughts in the comment section, which is always open for additional discussion.)
- Have a good cash reserve.
- Investing is not a hobby! Losing money is a real possibility for many reasons.
- Open up a new real estate office inside a tea room.
- Top tip right now is to get educated on local and state laws related to tenancy, eviction, vacation rentals and more. Make sure you are planning for less flexibility as a landlord in California. Perhaps consider out-of-state investment. For flippers, consider altering the game plan to accommodate higher acquisition costs and design expectations, and do more houses in one new area to create your own comps.
- As a constant buyer since 1996, I see this as an awesome opportunity to connect and network with active agents nationwide. I’ve met several from within this group, and I’ve been to other states, connected, and then invited them into my group to see more and learn more. If an agent calls me and says “I have a great deal for you!” my immediate reply is always: “How many properties do you own?”
Some take this as a challenge. It’s not. It’s so I’ll know how to proceed with the conversation at whatever level of experience they are at. Whether they rent, own their own home, own five properties purchased during a boom or own more than five properties purchased strategically, my next statement to them is: “Tell me why you think this is a great deal.”
If they have very little experience, I’d rather teach them how to bring me a “great deal” versus being the agent who thinks it’s a great deal because they’ll be getting paid! If I were to buy it, I’d be buying it underwater, going in! If they own properties, using their own money to make the payments/down payments, or have experience at ownership, I’ll know they have more experience, and I won’t need to spend too much time with them. A very grateful “Thank you for the opportunity” will be enough.
Creating an alliance through conversation and reasoning creates longevity. Trying to act like “I know more” or “I’ve been in this industry for 20 years!” from either side isn’t going to create much — and certainly not a purchase or a sale. I’m looking forward to the end results from gathering the tips from the active investor agents.
- What is your end goal and timing?
What did we miss? Please share your thoughts in the comments section below.