The Benefits of Hiring a Property Sourcing Agent
What is a property sourcing agent?
The biggest hurdle for many investors looking to enter the property market is the time and commitment property investment requires. Although they have the financial resources to purchase a property, investors face a barrier of industry knowledge and connections that take a while to overcome. Property sourcing companies bridge the gap between investors and sellers and provide the industry expertise that a new buyer may lack.
Overall, the role of a property sourcing company is to facilitate an investor’s journey to making a profitable investment. This way time-consuming tasks such as house viewings and market research are handled by professionals and an investor’s only responsibility is to make the final choice.
The benefits of hiring a Property Sourcing Agent for property investment
Knowledge of the Property Market
First and foremost, a property sourcing company will have highly valuable industry insights. Established property sources have years of experience and an understanding of market trends that an industry outsider will need years to learn. Consequentially, this reduces the risk of bad investments, for example buying in an area that it set to see a decline in rental yields.
A hands-off approach to investment
Building a property investment portfolio is rarely the main 9 to 5 job of investors. Most of our clients have full-time jobs or are busy running a business. As such, they have little time to attend house viewings and research market trends by location. Property sourcing companies, on the other hand, dedicate all their time to tasks like these. For example, at Closefield Property, we send our clients unlimited info packs with houses that fit their search criteria and arrange video viewings for the properties that they choose.
Tap into the network of your property sourcing company
The property investment industry has established connections with real estate companies, developers and property managers. Moreover, some property sourcing companies know how to tap into local markets and be the first to know about new properties up for sale. At Closefield Property, we implement targeted search strategies on Google and Facebook and use direct mail to find potential sellers. This helps us find new properties for sale often before they are listed on websites like Zoopla or Rightmove. We keep track of areas where we see potential so the investors we work with have a pool of great deals in front of them.
Better ROI and lower costs
Some deals may appear very appealing to the untrained eye. Coupled with a sense of urgency, they can easily lead buyers to rush into a bad investment. Property investment companies help investors avoid situations like these by finding the best deals for them. Most property sourcers have long-running relationships within the industry and can also assist with negotiating property prices.
In addition to securing a better deal, property investment companies help buyers guarantee a profitable return on their investment. When advising our clients, we focus on areas where rental yields are expected to grow such as Leeds, Manchester, or Birmingham. We take into consideration any regeneration plans for the city, new businesses expected to open shop there, and many other factors to predict whether an area will see growth over the next few years.
Finally, to ensure our clients can start benefitting from their investment as soon as possible, we have partnered with a network of managing agents from across the UK. As soon as the purchase process is close to finishing, they begin marketing the properties to find suitable tenants.
What you should look for in a property sourcing agent
Anti-money laundering check
In cases where a property sourcer is handling client finances, they need to register with HMRC for Anti Money Laundering compliance. Moreover, their registration must be kept up to date and renewed upon expiry.
Professional indemnity insurance
PI insurance guarantees that clients will be compensated in the case of damages they incur because of the property sourcing company. This is essential to protecting investors when finances are involved.
Property sourcing companies maintain a range of databases with information about their clients that may be considered private. In order to ensure this information is handled correctly, it should be registered with the Information Commissioners Office (ICO) for Data Protection compliance.
Property Ombudsman Membership
The Property Ombudsman functions as a middleman between buyers and property agents when a conflict arises and works independently from the government. A property sourcing company with a membership is preferable as this means buyers will not need to involve solicitors in case of a dispute.
Our Property Sourcing Process
Property Investment Deal Analysis
To guarantee the potential of investments, every property we show our investors goes through a 50-point checklist. Our checklist covers all aspects related to the quality of an investment – from its general state to maintenance costs, location and potential for rental demand. Moreover, we analyse the demand of the rental market based on similar properties in an area to estimate the realistic market value of a property. This way, we can show our clients what ROI they can expect and how much rent they will be able to charge on an investment
Property Info Pack
After the property analysis is complete, we put together an easy-to-understand information pack for our clients. It contains all our findings based on the provided search criteria and gives buyers all the essential information about a property. This includes details such as:
- Property size and location
- Photographs of the property
- Floor plans
- A cashflow chart detailing the expected investment performance
- Costs involved in the purchase
- Comparison to similar properties in the area
Over the years, we have built a network of property management agents across the UK who we recommend to our clients once a property is ready to be rented out. They are specialists in property investment management and deal with maintenance, finding tenants and collecting rent. Managing agents are essential to the success of an investment and our recommended agents are experienced professionals with a great knowledge of their local markets.