While restrictions on investor lending have clearly slowed down property investment activity, the investor market still represents a wealth of opportunity for the savvy broker.
Mortgage brokers play a key role as providers of finance to investors. This was recently reaffirmed by PIPA’s 2015 Investor Sentiment Survey, which gathered insights from more than 1,000 property investors. The survey results showed that two thirds (66 per cent) of property investors secured finance for their last investment property through a mortgage broker. An even greater number (72 per cent) plan to seek finance through a broker for their next investment loan.
These results are a great endorsement of the outstanding service proposition mortgage brokers offer. There are a number of key reasons driving investors to brokers, and in the complex borrowing environment we are now facing, that proposition is stronger than ever.
To further capitalise on our appeal to this market segment, it’s worth reflecting on what exactly draws investors to brokers.
I don’t really need to tell you this, but mortgage brokers are typically passionate about wealth creation and quality service, and we’re willing to spend quality time with clients to understand their specific needs and objectives. This can be a much more appealing proposition than that offered by bigger, impersonal institutions.
Investors are buying property for one key reason â€“ to make money and build wealth â€“ so it’s an important transaction and one they’re looking for quality support, guidance and service on.
Greater borrowing options
Generally mortgage brokers have access to a greater range of credit products than any single lender. Our in-depth understanding of the range of finance options available helps investors more quickly and easily find the best loan to support their investment strategy. For investors, the right financial set up and the speed to meet the deal are critical.
We save them time and money
Mortgage brokers are the preferred supplier of funds for sophisticated property investors, but these investors are normally
busy people who appreciate a broker’s help. Brokers know the ins and outs of dealing with banks and can take arduous paperwork requirements off their hands as well as get the best deal over the line.
The recent changes to lenders’ polices offer a platform for brokers to guide investors through the maze of complication and reinforce our overall value proposition. In a complex borrowing environment, we can talk investors through the changes and help them understand exactly what they mean for them.
As we kick off a new year, take some time to have a think about how well you are delivering on and promoting these key parts of your value proposition. Another question worth thinking about is how you can build out your investment offering to cater to this market.
More than just a one-stop home loan shop, many mortgage brokers are now expanding their service offering, and the incorporation of qualified property investment advice can be a powerful way to add to your investor proposition.
The incorporation of in-house or referral networks with other professionals can also help you build out your investment offering to ensure you can service investors’ greater needs.
Finally, remember that if you are going to play in the property investment space, it is always important to continue to build your knowledge so you can offer your clients valuable insights and advice.
Ben Kingsley is chair of the Property Investment Professionals of Australia (PIPA) and founding director of wealth advisory business Empower Wealth.
A qualified property investment advisor, Ben holds a real estate agency license, a Certificate IV in mortgage lending and a Diploma of Business, and is one of Australia’s leading property investment analysts and advisers.
PIPA is a not-for-profit association established by industry practitioners with the objective of representing and raising the professional standards of all operators involved within property investment.
As the chair of PIPA, Ben is at the forefront of the property industry and is a passionate advocate of ethical, professional property investment services.
Ben is also a regular media contributor and author, as well as the co-host of The Property Couch podcast.
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