With vacation-rental companies assisting, your clients may find investment properties a savvy option.
Housing prices continue to rise, giving current homeowners large chunks of equity they may not have had access to before. With services such as Airbnb and VRBO more popular than ever, many homeowners are testing the waters in the realm of real estate investment. Or some might just be considering buying a second home for their family, whether it’s a condo for a college student or a place where they go seasonally.
The availability of services such as VRBO is that they alleviate some of the risk by helping ensure investment properties are bringing in money and not sitting empty. As more and more homeowners consider the benefits of purchasing a second home to build wealth through real estate, a knowledgeable agent can become an invaluable ally.
The first thing to know however, is that there are different financing, legal and tax requirements involved with investment properties since they are not the owner’s primary residence. This does not need to be a deterrent as there are still a lot of pros in this venture. Potential investors just need to be aware of them so they can make an informed choice when they consider the decision to buy.
Serious real estate investors aren’t likely to stop at one property, which is why having knowledge about these types of purchases is highly advantageous for lenders and Real Estate Agents. If you form a relationship with an investor, you could end up their consultant for multiple purchases in a certain region or over a short amount of time compared to standard home purchases.
For Real Estate Agents, developing a specialization in investment properties and rental listings can benefit you in several ways. First, there are the often-absentee owners who need a local presence to help keep their properties occupied. Then, there are the renters themselves, each a potential convert to vacation homeownership after staying in the perfect place. The third avenue is to work with the investors for whom you find renters, helping them spot new possible properties for their vacation rental portfolios.
Some real estate companies have been known to offer property management services to fill a need for their investor clients and make sure properties the client may want to sell in the near future are kept in good repair with responsible renters. The more services you can offer your clients who potentially represent multiple transactions in the short and long term, the more advantageous for you. All of these opportunities allow for you to establish and ongoing relationship with your client so you are the first person they call for all their real estate needs.
Hot Areas in Your Region
You don’t need to live on the coast or near a ski resort to have a hot investment real estate market. Homes or condos by colleges are ideal for investment properties as you can get new rental tenants every year and additional turnover during the summer. Vacation rentals are good for visiting parents or families on college tours. They’re also great if the school has a sports team that will regularly lure alumni to attend the games. Perhaps your city has a pro sports team that brings large groups of fans? Are you near a great shopping area or a theme park or close to a location with a large influx of seasonal workers? If you can determine that niche for your area, you can use it as a selling point when talking to clients who are considering investing in real estate.
Whatever brings vacationers and short-term renters to your market, brings opportunity as well. As an advocate for your area, consider redirecting your enthusiasm into making visitors feel so at home that they want to convert from vacationers into future “staycationers.”
Have the Answers in Advance
The more you can educate yourself about the ins and outs of purchasing, financing, renting, maintaining and reselling second homes or investment properties, the more you can become an authority for your clients. Some may be just considering dipping their toe into the purchase-to-rent realm but once they start, who will they go to for their next purchase and the purchase after that? You can make yourself invaluable by becoming their eyes and ears on the street, when you alert them to potential properties before they hit the market.