As licensees, we represent our clients. It’s the listing agent’s job to find the best places to invest in real estate and get the most money for their client at closing. Being open and honest about the property condition expedites its disposition and maximizes potential profit.
What Real Estate Investors Look for in the Best Places and Properties to Invest In?
Here are the five sure-fire ways to attract real estate investors to any listing.
1. Agent Comments
Honest and truthful agents have smoother transactions throughout the process. What’s the point in lying about a property to lure people in just to waste time, money, and resources on a sale that’s not solid?
If the property is a fixer-upper, say so. Don’t mislead people – they’ll do an inspection and find out long before putting any money down. If you gain a reputation for either following your word or not, it sticks with you. Investors aren’t willing to take a risk when the listing agent is lying.
2. Cumulative Days on Market (CDOM)
A property’s CDOM impacts its fair market value. It’s a simple principle of supply and demand. Every agent knows the longer a property sits on the market, the less it’s worth. Properties that sit for several months or more are more likely to have owners who are flexible on the price. Bringing in a third-party appraiser will help you get more realistic about your property’s true value.
When a fresh property in one of the best places to invest is listed, that sense of newness inevitably draws in a spike in views and inquiries. As time goes on, the expense of keeping a property in “show condition” 24/7 becomes a burden. Sellers in this position will take less than the original asking price just to finally close a sale.
3. Occupancy Status
A property’s occupancy status says a lot about its potential as a real estate investment. Vacant properties mean the seller has at least two homes: the one being listed and the one being lived in. Insurance premiums on vacant properties because they attract crime and other damage.
On the other hand, a vacant property can be easier to access to assess damages. Touring an occupied home takes time, depending on whether the occupants are tenants or owners. Scheduling and other issues can occur, but if you’re looking for a real estate investment, occupancy rates will matter in its ultimate ROI.
4. Price Reductions
A property that has been reduced in price repeatedly is a signal that it will be reduced even further. This is a great sign for commercial investors, who likely have the resources to demolish the entire property, if necessary, to rebuild from scratch. Institutional investors don’t care about the condition of a home and are willing to buy in any condition. From there, they simply hire contractors to convert it into something of value.
Retail stores commonly use this tactic to show reduced prices from the original or “suggested” retail price. If you’re looking for a fast sale, start by already showing a reduction in some form. Then continue small, incremental price drops to continue putting heat on any holdouts. If you want to practice with lower stakes, try eBay auctions to get the hang of it.
5. Options Period
If a property needs a lot of work, investors will need time for inspections and repairs to be completed. Short options periods and threats to not extend the option period may sound great to you, but you’ll deter investors. Commercial investors want a quick and easy transaction, and they are often willing to pay for convenience. But when it becomes clear you’re going to be a problem every step of the way, they’ll back off.
Be reasonable and offer options periods consummate with the amount of work needed. If a property has been sitting abandoned for decades, understand that someone’s going to pay the costs to renovate or destroy it. If that’s not you, move on.
Get Clients to Invest in the Right Real Estate Property in the Best Places
Investing in real estate is a subject every realtor needs to be immersed in to attract high-value clients. These institutional real estate investors make larger purchases more often. Sometimes they even buy in bulk, making it easy to offload properties no family will buy as a starter home.
Upgrade your skills by enrolling in advanced real estate investment courses from The Real Estate Business School today.