There are 3 kinds of investors – what kind of investor are you?
Property investing is a tricky endeavour, but with the right strategy, budding investors can find their way to pulling ahead of the herd and be on their way to building wealth.
This year, InvestorKit partnered with Smart Property Investment and Agile Market Intelligence to produce the Buying with Confidence report. Backed by a sample size of 626 respondents, the report aims to empower current and prospective investors to score big in the business.
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The report unveils three different personas of Aussie investors: the do-it-yourself (DIY) buyer, those who seek only partial assistance from local buyer’s agents, and those who go all-in and tap a full-service buyer’s agent.
According to the study, the majority of respondents (62 per cent) did not use the services of a buyer’s agent in their most recent property investments. These independent buyers flexibly strategise their investment approach, aligning it not only with standard preferences such as budget and risk appetite but also their personal choices.
For DIY investors, agent fees and commissions are out of the picture. With the opportunity for a higher profit margin, more than half (52 per cent) of future property buyers plan to start investing independently.
Nevertheless, everything comes at a price, and it’s no different in real estate. In exchange for a larger cut of the pie, these DIY buyers bear the weight of client negotiations and market assessments, ensuring they get the best deals available.
The added responsibilities have proven to be a considerable hurdle, as when asked what approach existing property investors will use on their next investment, three in 10 DIY investors said they plan to tap the assistance of a buyer’s agent. The significant chunk of DIY respondents wanting to change investment tactics stresses the many challenges of going solo.
Full-service buyer’s agent
Among future investors, the portion of those who want to get assistance from a full-service agent and a local buyer’s agent were 19 per cent and 29 per cent, respectively. This contrasts with the study’s findings on the preferences of current property buyers.
The study revealed that one in four (26 per cent) active investors used a full-service buyer’s agent for their purchase. By paying agent fees and the corresponding commission for closed deals, these buyers benefit from expert advice and assurance that all properties offered are backed with due diligence and in-depth market analysis.
Three in four of those who tapped the assistance of a full-service buyer’s agent said they plan to use them again in their next purchase. This high retention rate shows the high satisfaction among active investors with partnering with agents who guide them throughout their investment journey.
Local buyer’s agent
Investors with an eye for prospecting properties but dread the corresponding paperwork seek local buyer’s agents to streamline their purchase. Twelve per cent (12 per cent) of the respondents embodied this persona.
Compared to DIY investors, who had a 70 per cent retention rate, that of local buyer’s agents only sat at 38 per cent.
Even more interesting was that more than a third of the latter want to switch to a full-service agent, suggesting that these investors want more than just assistance in their purchase.
Download the Buying with Confidence report and explore how a buyer’s agent can help you get to your investment goals!
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