If your client is looking to make an investment in the real estate market, these are the essential steps that you should review with them to ensure a smooth and successful purchase.
- Have a clear strategy
Be concise with your client’s strategy whether it is for short, medium or long term investment. Also if they do intend to keep the unit for a long period, will they be renting it or using for personal use?
By being clear on these points it is easier for you to advise them on the right type of investment and help ensure they achieve the results they expected.
For example: If your client plans to make a long term investment and rents the unit to pay for the mortgage, then it is very important that selecting an area that has high demand for rental and the average prices will cover their mortgage. Added benefits would be a guaranteed rental scheme and a fully furnished unit from the developer.
- Know your client’s financial situation
Be sure that your client’s investment fund and strategy go hand in hand with each other.
For example: If they plan for a long-term investment and intend to rent the unit before they sell, make sure that they have enough capital to cover the additional costs involved.
These might include furnishing the unit, paying maintenance and repair fees, agent finding fees and ongoing property maintenance. Also they might have long periods with no tenants so they should keep a contingency fund for these occasions. So remember to deduct these additional costs from the purchase price to ensure your client doesn’t have cash flow problems.
- Find the right location
The age old saying of location, location, location is really the key success factor. Once you know your client’s investment strategy and calculated their finances carefully, the next is fitting their plan with the right location.
(This is where searching on Sellorate make the task much easier. You search for price, location, facilities and much more all on one site.)
For example: If their goal is for a long term investment and require a long term tenant, then locations near noisy touristy areas might not be ideal. Alternatively locations near large government buildings or hospitals might be more the type of tenant your client is looking for.
- Do your research
Once you have narrowed down your search, it’s now important to show off your expertise in this area and the project the client is looking to buy. This is really where a good agent shows their value in the advise their to the client.
The more you study for your investment, the more likely you are to be successful.
For example: In regards to the area, insider knowledge is priceless, whether it is the future plans for a new mass transit line, a new condominium being built next door or renovations to local canals, these factors can drastically raise the value or reduce it.
The developers reputation is very important, with particular focus on the quality of their previous projects, and the unit you choose, whether it is next to the elevator or garbage room, south facing or on the top floor, can all affect the resale and rental price of your unit.