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How To Find And Deal With Landlords Desperate To Sell
The number one target on a property investor’s hit-list is a landlord that has had enough and desperate to sell. A lot of property owners get into these situations because they are not really property investors. Properties are just an investment vehicle that they have jumped on. Seeing how much money other people are making money from properties, they jumped on the overcrowded bandwagon without learning how to take care of their investments. Real estate is unlike stocks and shares where all you do is buy, hold and sell. You are required to put in time and effort to make it a successful worthwhile investment.
Just imagine buying a gorgeous sports car which you have plastered all over your bedroom since young. But you do not have a driving license. Even with the best engine, wheel grip and braking system, you are very likely to get into an accident without a driving license.
Investing in properties works very much in the same way. You could be holding onto a great apartment that has high value and rental rates. But if you do not have the necessary skills and knowledge to manage it efficiently, you are going to burn out. The best way to manage your property is to outsource it.
A lot of landlords initially find it fun to build up and decorate their investment properties. They then attempt to save every cent possible by completing tedious tasks like cleaning and repairs themselves. After a prolonged period, this becomes a very tiring process that is not productive at all. It soon becomes a chore to manage the investment.
Landlords that are tired of the tedious work needed to manage their properties are not the happiest of people. They make themselves personally liable to tenants that they become the servants to their tenants. They receives phone calls every other day on maintenance and repair issues while going about their full time jobs. Imagine being in a meeting with your boss and receiving an urgent call about a choke in your toilet bowl. Being a landlord can be stressful indeed. Property buyers who are just riding the property wave in the hope to make money like the crowd usually grow tired of managing the property in about 2 years.
By just looking at images on property listings, you can quickly see apartments that stand out which are not properly maintained. This is a clear sign that the owner does not care that much anymore about their investments. For landed houses and buildings, keep a look out for peeling paint-work, wall cracks, overgrown grass, broken windows, etc. Just ask yourself this simple question when evaluating these properties – Is it in desperate need for repair? If the answer is yes, you can shortlist that property as one having a desperate landlord.
This is because the symptoms mentioned above are signs of burned-out landlords who are tired of the making the effort to maintain their properties in top condition. This starts a downward spiral where tenants leave, property depreciates, rental decreases, and quality of tenants decrease as well.
What types of tenants will be willing to move into an apartment that is in bad condition? Those that are desperate and have little choice. These are also the type of tenants that are most likely to cause damages and create problems. In this instance, why would a landlord spend money of refurnishing when the tenants are already paying below market rate and also likely to damage new furniture as well? Thus, it becomes more logical not to revamp the apartment. The downward spiral continues.
So the time will come when landlords think about selling the place to get rid of these stressful issues once and for all. Mortgage payments are getting harder and harder to stomach anyway. These situations actually happen very often in overseas emerging markets. Whether local or overseas, it presents a good opportunity for you.
Another place to find stressed out landlords is where they file claims against their tenants. That is the small claims court. Eviction can be an emotionally and physically draining experience if the owner does everything himself. When a new investor first bought an investment property, little did he know that this is part and parcel of being a landlord. Suddenly, you appear like an evil vulture driving a poor family out of a place to stay. The most common reasons for eviction is failure to pay rent and the refusal of existing tenant to pay new market rates. It is a tough decision to make. A good tenant could have been promptly paying your rental for the last 2 years without causing any real damages on your home. But market rental rates have gone up tremendously and the tenant is unwilling to pay existing rates. You have to decide between absorbing the opportunity costs or eviction. While a bad tenant may be owing rental for half a year. The only reason why landlords wait for such a long time is to avoid the stress of eviction. Tenants who refuse to pay up and insist on living in the property for free is actually a very common occurrence. This is when you will find graffiti on your walls when driving them out.
Imagine the above scenario that some landlords go through. And a lot of landlords are individuals who are just trying to make some money by investing in properties with their extra cash. They have been promptly repaying their mortgage for the last 6 months without getting a cent back from rental. They feel like a bad person for driving someone out of the house. And more money has to be spent on repairs on the apartment for damages caused by the evicted tenant. Who is to say the next tenant will not be the same? Going through all this stress now appears undesirable at all.
The property passive income model suddenly seems anything but passive. The retirement dream suddenly becomes a nightmare. The moment you dread going to one of your properties instead of looking forward to it is when you will be open to selling it.
Some tips of renting out your apartment from Professor Property.
Landlords Who Have Had Enough
Sometimes it is really this simple. Landlords are tired of managing their properties and want to sell to get out of their nightmare. They might have nicely done up apartments with good tenants. But the stress of handling all the tedious stuff themselves has finally taken it’s toll on them. And who can blame them for trading their plumbing tools for a huge payday. In order to close the transaction fast, they will be willing to compromise on price. You have to be perceived as a serious genuine buyer to get to this stage.
Since these are good properties with good tenants, you will be foolish to think that you can get rock bottom prices for them as if you are shopping for casual wear in Shenzhen. People are not stupid and being an investor themselves, these landlords know how much the market values their property. They are just that little bit willing to compromise in exchange for a quick hassle free sale. In such an event, make a quick call to your mortgage broker to get a quick loan approval. Then make your move.