Investment Success: The Role of Brokerages for Savvy Investors

Strategic property investors look at both the liabilities and assets columns when they’re assessing their business processes. However, many real estate investors focus on the property price above all else, including the initial purchase price, cost of repairs, and final sales price.

While the house is the biggest line item to weigh, it’s far from the only significant one. By evaluating other costs—marketing, holding costs, professional services, and so on—you can find even more ways to shave down expenses and proportionally increase your return on investment.

To optimize your strategies even further, it’s better to structurally reduce these costs and change your workflows to minimize unnecessary expenses. For example, you might use the same finishing materials on every flip so you can utilize excess materials and buy in bulk. Another tactic is to assess how much value your brokerage is bringing to the table and what another brokerage can do better.

Online brokerages can give you faster services, access to more data, and greater control over the sales process: advantages that tie directly into real estate property investment success. 

Key Objectives for Real Estate Investment Success

Whether you’re experimenting with real estate investment as a secondary stream of income or real estate investing as your full-time occupation, it’s important to think of it as an investment business rather than individual projects or challenges. Some of the primary objectives to make this a successful venture are:

• Replicable Business Processes: Build your business with processes that you can use again and again. If you have highly variable processes, such as switching between different service providers or customizing every property, it can be very difficult to manage costs and timelines.
• Positive Cash Flow: It’s not enough to have profitable operations. You should also have cash flow so you can pay for renovations and services between each sale. The initial process of buying and fixing up homes is expensive. Initial investors might lean on savings, but investors with bigger portfolios can lean on rental income or proceeds from other properties. 
• Low and Predictable Expenses: Lowering and standardizing your expenses will help you achieve both profitability and positive cash flow. As you refine your processes, compare competitors and make sure you aren’t paying for services you don’t need.
• Accurate Forecasts: Create a plan for your business and anticipate how your investments will change over time. Creating forecasts and using them to measure progress keeps you on track to reach your income goals.
• ROI Goals: Real estate investments can have large expenses and rewards in sudden bursts if you flip homes, and it can be a continual drip of revenue if you have rental properties. Instead of just evaluating costs and revenue, savvy investors continually monitor ROI—are your profits coming in from reasonable expenses, or are you working too hard for too little reward?

Related: Investment Success: The Crucial Role of Brokerages for Investors

Whenever you’re considering buying a property or changing how you operate your business, keep these factors in mind. Business decisions, like which brokerage you use when you list and sell your properties, will impact virtually every aspect. So gauging when one brokerage gives you better pricing, ROI, and predictability than another makes it easier to move your business in the right direction.

How Online Brokerages Help Investors Reach Their Goals

More and more investors are moving to online brokerages that offer flat-fee MLS listing services and other flat-fee optional services. Compared to the comprehensive approach of hiring a real estate agent, who manages the listing process on your behalf for a hefty 3% fee, this option offers investors the versatility and control they desire. 

Some of the benefits are immediately obvious to investors. Online tools are more convenient, flat fees are more predictable, and a la carte service options let you pick and choose which services bring value to your business. Today’s cutting-edge technology also offers knowledgeable investors an edge in real estate. You can comb through market data more effectively and send instantaneous communications to buyers, contractors, and everyone in between, a significant improvement over slower real estate practices through a third party. 

Consider how these specific benefits of working with the right online brokerage can help you reach or surpass the key objectives of successful real estate investing.

Smart Pricing Tools With Current Data

Market trends aren’t as turbulent as they were during 2021, but pricing still changes every day in virtually every market across Texas. The comparative data you might have used to buy a property six months ago won’t reflect the market data over the past 90 days. Interest rates and pricing trends are simply changing too frequently. But when you list a property for sale, that initial listing price must be accurate to attract good buyer leads.

Some online brokerages offer AI- or ML-powered pricing tools that use large databases of historical and current pricing trends to recommend price ranges for your listings. This means you can accurately price your property in a fraction of the time.

Marketing Management Options

When you’re selling a property, your marketing efforts determine how much interest you can garner in the property and the types of offers you get. Look for online brokerages that give you these options:

• Flat-fee MLS listing services: Instead of hiring an agent and using them as an intermediary to list your properties on your regional MLS database, you can pay your online brokerage a flat fee and more directly control the listing and any communications that come your way.
• Support and equipment for open houses and private showings: Open houses allow potential buyers to see your property, but you must advertise them with signs and online postings to bring in big crowds. Even if you opt out of open houses, private showings are a must. Prospective buyers will want to tour the property for themselves. Online brokerages can give you the Supra device for allowing access and the digital platform you need to coordinate with buyers’ agents.

Negotiation and Document Management Tools

When you work with an online brokerage instead of an agent, you maintain control of the negotiations and sales process. While this isn’t necessarily ideal for all sellers, investors benefit by being in charge of their own processes. Conventional real estate agents are expensive, and the sales process becomes too opaque when they’re the ones talking with other parties and handling deals. 

Related: Smart Tools for Success: Top Apps for Real Estate Investors

Good online brokerages provide optional support features. These include portals for managing offers and contract documents, task management tools for moving through to closing, and even available real estate agents whom you can consult with as needed. This gives you what you need to control expenses in addition to cash flow and ROI.

Removal of High Commission Fees

One of the key benefits of trading a conventional brokerage for an online provider with flat-fee services is that you aren’t paying a listing agent’s commission. This generally comes out to 3% of the purchase price. Instead, you can break down that 3% and buy the real estate services you need: MLS access, private showing tools, and even professional house photography. This will often significantly decrease your expenses. Just as importantly, you’ll know the cost of each line item service and can make the right choices for each property.

Repeatable Standardized Processes

Along with cost savings, the biggest strategic advantage of choosing an online brokerage is standardized processes. With a mobile platform, you can control the workflow and decisions of every listing. On one property, you can purchase photography services, pay for an MLS listing, get comprehensive marketing support, and ask a consultant a handful of questions. 

On another property, you can use a smart pricing tool and list the property on the MLS. You have the price sheet right in front of you, and you know which options are available. Therefore, you can speed up the process and move through a checklist of decisions.

Investment Opportunities Across the Whole State

If you want to work with a single brokerage to simplify business processes, that’s an excellent strategy. But if you choose a conventional brokerage, they typically only have experience in one region. For example, a brokerage based in Dallas may have agents familiar enough with Denton to help you, but they won’t be well-versed in San Antonio properties. Alternatively, you can find an online brokerage with data for every town and neighborhood in Texas.

Get the Tools Savvy Investors Need

When you’re choosing a brokerage that fits your investment business, compare what traditional and modern online brokerages are bringing to the table. Consider costs, the level of control you have, and how quickly you can operate through the brokerage you choose. 

Once you’ve done the math, see how services from ListingSpark can help make your investments a success. We offer flat-fee MLS listing services, pricing tools, and a la carte marketing services so you can manage listings the way you see fit. Contact us today to start your journey of becoming a savvy investor.