Many investors today feel positive about their investments and optimistic about the real estate market. As they make moves, investors turn to experts and tools to help them make informed decisions for increased performance. Investors generally have a favorable view of investment management companies, but there is work to be done to meet their growing needs.
To meet investors’ top concerns, it’s essential to understand what they are worried about and what can potentially have the most significant impact on their decisions. In a recent Real Estate Investor Report, AppFolio Investment Management dove into the perspectives of real estate investors to get a clearer understanding of what issues they were facing and what solutions they were pursuing in response.
Top Concerns of Real Estate Investors
As investors look ahead to their most prominent challenges, several primary concerns should be addressed. The Real Estate Investor Report took a closer look into these issues to get a clearer picture of investor perspectives.
Diversifying Investment Strategies
Most investors know they should have a variety of investments, yet many are naturally drawn to the kind of investment they best understand or feel most excited by. As an investment manager, it’s your job to help clients consider how they can best balance their portfolios.
According to the Real Estate Investor Report, the average investor holds around two types of real estate investments and is likely to hold other investment types, like stock, cryptocurrency, or venture capital. Investors say the biggest opportunities exist for several property types, including:
- Warehouses serving local markets
- Adaptive reuse of abandoned spaces
- Foreclosed or cash-strapped properties
- Homes in the suburbs near big cities
Understanding opportunities and increasing strategies to diversify within the real estate market can help investors weather the storm of volatile markets and unexpected change. Investors are generally interested in long- and short-term investment products with tools that will help them effortlessly track their portfolio and start making decisions about new products.
Time-Saving Tools and Tech
Most professionals are busy and trying to manage their work-life balance. They rarely want to spend a lot of time in meetings if another solution is available. There is always a push to integrate tools that help them accomplish more and increase insight while reducing time involvement.
Investment managers need tools that save time and allow contactless interactions for their clients. AppFolio found that 43% of investors in 2021 said their biggest challenge was staying up-to-date with the industry. This was especially true for investors under the age of 45, and this had increased by 16% since 2019, when “finding a good investment manager” was the top concern for 31% of participants.
Portfolio Visibility and Access
There may have been a time when investors were happy to stay out of the process and let managers control their portfolios with occasional check-ins. However, today’s investors have a different approach to watching market changes and staying involved in their investment strategies. Investment managers should take advantage of tools that help shed light on opportunities, real-time industry changes, historical data, and portfolio performance.
Additionally, in the 2021 report, 32% of investors listed access to personal investment information as a primary challenge, and 35% felt they had difficulty keeping track of their investment performance. These concerns can be eliminated if investment managers incorporate tools designed to simplify reporting and offer straightforward account visibility.
Increased Availability and Responsiveness
The conflict between “always on” and work-life balance creates an interesting challenge that is most often solved with technology. Younger generations are growing up with on-demand tech designed to be fast, responsive, and versatile 24/7. Access to a real-time portfolio and market visibility is crucial for many of today’s investors – especially younger investors who are screen natives and familiar with solutions technology can solve.
As an investment manager, you can’t be available around the clock to respond and provide updates. However, a sophisticated market tool can offer that data, providing insight regardless of your schedule or the time of day. Automating responses to common questions and portfolio updates will also help improve clients’ perceptions of your availability and responsiveness without actually overburdening your workday.
Navigating Outside Influences
Of course, investors are always on the watch to see how their portfolio is going to weather changes they can’t control. While diversification is a huge help in preparing for volatile market shifts, there is also a desire to forecast challenges correctly. Some of the top concerns for real estate investors include:
- Banking regulations and requirements
- The uncertain economy
- Continued COVID impact
- Finding good, long-term tenants
It’s also interesting to note that while COVID still poses a concern in some ways, the concerns are mostly about transitory challenges (like making rent collection hard). The majority of real estate investors say they are not planning any investment strategy changes in response to COVID.
Rise to the Challenge with Modern Solutions
Many of the top concerns for real estate agents can be solved with the right tools and technology access. For the investment manager, understanding these issues and addressing them proactively will help build trust with clients.
Investors continue to see a bright future for real estate, and many plan to invest more in their real estate portfolios in the next few years. When choosing investment managers, investors want knowledgeable and involved managers that can communicate with them when they have time. They also want to be able to access information and be updated easily.
Provide Insight and Clarity with AppFolio
Integrate software that allows you to communicate with clients and safely keep account balances online for them to view at their leisure. This increased access and transparency will help you keep clients who value more of a digitized experience and entice new clients who currently feel left in the dark.
AppFolio Investment Management allows you to safely share documents and information with clients, acting as a user-friendly portal where clients can view investment performance. Talk to our team for a FREE demo to learn more about what the Investor Portal can do for your clients.