Customers play a significant role in the real estate business. Realtors are more likely to enjoy success if their clients are happy and satisfied with their services. As a result, happy customers will recommend their friends, relatives, or co-workers about a real estate agent. There is a lot of competition in the real estate industry. Unsatisfied customers will have to look for similar services from other agents. It is why realtors need to adopt CRM. It helps them attract and retain customers.
Understanding CRM in Real Estate
Thanks to technology, real estate agents can use CRM tools to interact and create meaningful relationships with clients. Moreover, they can manage the business from a single platform anytime and anywhere. Here is why CRM is vital in the real estate industry.
In most cases, CRM tools help realtors track and manage leads. Whether the realtor turns the lead into a client will depend on how quickly an agent responds to the lead. Additionally, existing clients expect real estate agents to respond promptly to their feedback, queries, and complaints. If a client is asking for price estimates, the agent who responds quickly has a better chance of being hired.
CRM tools allow agents to communicate and respond to their clients’ concerns quickly and from anywhere. Moreover, the software will track and record all interactions to help develop effective marketing campaigns.
In the real estate business, relationships between the agents and clients shouldn’t end. It is because previous clients can tell other people about the services. Moreover, they can contact the agent when they need to purchase property in the future.
Realtors should send emails or automated messages to clients during holidays, birthdays, or anniversaries to ensure long-lasting relationships. The timing should be right. Otherwise, they are unlikely to read the email.
Managing Marketing Campaigns
Customer relationship management (CMA) helps realtors track and manage marketing campaigns to identify their business’s most effective campaign.
Easier Decision Making
Sometimes, it can be hard to determine in which client you should invest. Also, real estate agents can spend a lot of time on deals that won’t yield an acceptable profit. CRM analytics helps realtors identify better clients and sales.
From the above, it is evident how CRM software impacts the real estate industry. It allows realtors to maximize their time and also improves productivity and communications.
How do you know if a house is a smart investment or a good property to flip? You may be looking to acquire properties for your portfolio. The problem is it can be a struggle to identify good deals quickly. Read on to learn how the 70% rule will help you.
The 70% Rule is a Simple Rule of Thumb.
Investors and flippers should use the 70% rule to determine whether to buy a property. The rule states that you should only pay 70% of the after repair value of a home.
An example would be a $175,000 home that needs $10,000 in repairs. After repair, it would be worth roughly $200,000. A flipper or investor should only pay 70% of that. The total they should pay is $140,000 for the home.
This protects them from overestimating the value of the home. It also protects against downturns in the market.
Speculating that a property will increase in value can be very dangerous. Seasoned investors prefer to make money when they buy to minimize their risks. This also protects them in case they missed something.
Other Factors To Consider For the 70% Rule.
You should also consider a few other factors. Settlement costs, financing costs, and carrying costs take a large chunk out of the deal too.
Closing costs on a $200,000 property could easily be 2 to 5% of the property. This means it would be up to $10,000. Financing costs would likely be around $5,000.
You should subtract $15,000 from your offer price to account for these factors. Some sellers may not discount the whole amount. It is better to get some of these off the cost to protect your margins.
Exceptions to the 70% Rule
The 70% Rule is a simple rule of thumb for finding rentals and flips. It is only a starting point. There are other circumstances where you might want to ignore it.
One of these cases will be if you’re holding the property long-term. Then, you would not spend as much on renovations.
You would be more concerned about the cash flow. Getting a good deal would still be necessary. A better price will still allow you to get lower monthly payments. Lower payments will help you with cash flow.
Take the time to determine your situation and goals. Are you looking to get quick cash? Other times you’ll be looking for steady returns over the long-term.
The 70% rule is a good rule of thumb. You should always be cautious with your repair and closing costs. It is a good starting place to protect your profits.
An essential skill in making a house flipping profit in the real estate business is knowing how to value a house properly. For individuals who are in the industry to make profits from low purchases. Here are ways to determine worthy homes to flip.
Average Value Determination: The house post-rehab value is determined by considering the cost of the houses in the general vicinity and the price of recently sold homes similar to the post-rehab vision. The final worth after repairs is the value you use for determining the worth of the house.
Standard cosmetic rehab: A general rule to estimate repair costs is $20 for every square foot. Based on this assumption, adjustments can be made upwards or downwards depending on the individual house’s specifications. This value will help determine whether to select the house for flipping.
Transactional expenses: Purchase closing costs are usually paid by the seller and account for 0.5 percent of the purchase price. The selling closing costs range between 1-6 percent, with an additional 1 percent as attorney fees. Holding costs such as property taxes, insurance, utilities, and maintenance costs should also be considered.
Offer price-setting- There are formulas to determine what offer price will be stated. One way is to get 70 percent of the average repair value deducting the repair costs. Another way is to subtract the repair costs, closing and holding expenses, and desired profit from the ARV to get the right offer price.
Geographical setting: Proximity to facilities such as shopping malls, transportation services, and school increases the property’s value while highways and airports decrease it. Different locales may have various school taxes, municipal and private trash collection companies with different days.
Physical attributes: As much as the seller wants the house to stand out, it shouldn’t be so significantly marked up in features that it overshadows the neighboring houses. It will only lead to a scenario where it will be too costly for that neighborhood. The most successful house flips are those that have the most work. However, if structural issues are suspected, it would be wiser to buy a house in better condition.
Lenders- Rehab lenders give between 65-70 percent of the ARV. This factor is because an investment is made with the anticipation of making money in the end. If the lender advises otherwise, then there will not be enough equity for the investing party to make money in the end.
As a real estate agent, finding the right home for your client isn’t always easy. To find a home that interests a buyer, make sure that you know the buyer’s interest, which is a step in the right direction. To do this, you can ask the client what features they want in their home, and this way, you’ll be able to find the right home for them. Below are some of the trends that attract home buyers;
Many home buyers are always interested in a home with an outdoor space where they can get out of the house and relax without leaving home. In other cases, buyers want a blending indoor and outdoor living space where the living room is extended to the backyard. Outdoor spaces are important to buyers because, in summer, this space is perfect for dinners and barbecues or holding large gatherings.
Location is another critical feature that buyers consider while buying a home. A home that is located in a secure neighborhood is one of the homes that interest buyers. Also, many are usually interested in homes that have easy access to main roads. Locations like these can
be very pricy, so it always necessary to go with your client’s budget.
The kitchen is usually considered the heart of a home. Homes with large kitchen areas, especially open floor kitchens, seem to sell faster. They sell faster because an open floor kitchen allows easy transition between rooms.
Many people have jobs which allow them to work from home. A home office is a feature that such types of buyers look for when purchasing a home. A home office with a door is essential because it helps one concentrate on their work without destructions. The room’s color choice should be considered because some colors do not provide a conducive environment to work.
Nowadays, home buyers are interested in homes that are energy efficient. Such homes are the ones that have hardwood floors, double panned windows, and energy saving lightbulbs. Homes that are energy efficient help to limit utility bills and also benefit the environment
The Number of Bathrooms
Homebuyers are often interested in homes with at least two bathrooms. As an agent, try looking for new homes for your client because most of them have this feature. A home with two bathrooms or more will tend to sell faster than that with only one bathroom because they help save time because you don’t wait around to wait for someone to finish using the bathroom. You could use the other one.
Every home buyer wants a home that has the features mentioned above. To find a home that ticks all these boxes, real estate agents should consider modern homes at affordable prices.
Covid-19 pandemic caught us unaware in 2020, bringing a lot of uncertainty in the financial and property markets. Yet, like every dark cloud, the silver lining was the realization that our homes should be a paradise where we can be comfortable even when on lockdown. Well, 2021 is promising to be a healing year. And, we anticipate more homebuyers looking for low-cost properties in less dense areas. Here are three such best locations for real estate investing in 2021:
Population: 1.4 million
Median Home Price: $298,998
Cost of Living: 102.3
Raleigh, a high-tech powerhouse, ranked #3 as the best location for business and careers in the US in 2019. Despite the pandemic in 2020, Raleigh offers lucrative job opportunities, a good climate, and a conducive family culture. According to Zillow, home values in Raleigh grew by 5.7% in 2020. They are to rise by another 7% in 2021. And more people are migrating to Raleigh, making it a prime spot for real estate investing in 2021.
Population: 1.345 million
Median Home Price: $238,156
Cost of Living: 101.6
The Dallas housing market felt the impact of Covid-19, causing its residential sales to drop by 35% in May 2020. But, the market is recovering, experiencing a 20% increase by July. And, the mortgage rates are at an all-time low, a great incentive to homebuyers. This prime spot has a growing job market that supports the 59% renter population. Areas like Flower Mound have 10,000 job openings, accounting for its 115% renter population rise.
Median Home Price: $268,424
Cost of Living: 100.1
Tampa Bay is hosting the 2021 Super Bowl, its fifth time to host the tournament. With this, the international stage shall boost the city’s economy. Already, the city’s unemployment rate is dropping, reaching 6.8% in August from 10.2% in April. Likewise, a third of the population is renters, opting to take part in international events while on vacation. And, rental properties near the MacDill AFB attract military personnel with access to a guaranteed housing allowance. The allowance motivates them to rent first before buying a house in the region.
The millennials are now getting into their prime buying years, and rental income is on the rise. And, the just concluded presidential elections saw politicians doing all they can to support the economy. Hence, 2021 presents real estate opportunities in these three top cities.