Sales tactics change if homebuyers are investors

WASHINGTON – Sept. 28, 2007 – Many Realtors focus on investors as a means of ensuring a steady stream of business since they tend to purchase multiple properties in a given year – as opposed to homeowners, who tend to move only once every few years. However, working with investors requires different skills, as Realtors need to emphasize numbers over location and amenities.

Associates catering to investors must be able to provide an income and expense analysis; track appreciation; and have a working knowledge of capitalization rates, cash-on-cash, internal rate of return, and other benchmarks important to investors. Real estate experts say advanced business degrees and investment courses are useful – and practitioners attending the National Association of Realtors’ 2007 Conference & Expo in Las Vegas should consider the session “The Four Measurements of Real Estate Investments.”

Communication also counts, and experts say Realtors must learn to listen closely to investors in order to give them accurate advice. According to broker Chad Dixon of Hearth & Haven in Chandler, Ariz., “You have to understand clients’ expectations, what they want to accomplish, and what their tolerance for risk is. You also have to help them understand that real estate investing isn’t a get-rich scheme.”

Realtors can drum up investment business by joining or creating a real estate investment club, as well as by focusing on referrals and out-of-state buyers.

Source: Realtor (09/07) Vol. 40, No. 9, P. 20; Evans, Mariwyn

© Copyright 2007 INFORMATION, INC. Bethesda, MD (301) 215-4688

Questions, comments or suggestions on this article? Have a news tip? Send a letter to the editor to: Newseditor@floridarealtors.org.