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6 Avenues To Locate Rental Property Opportunities
Locating the right property to purchase is the number one factor to an endless stream of rental income for as long as you keep hold of it. But there is a bulging criteria that make a property the right one. Among them are financing options, location, rental demand, market rental, etc.
Regardless of how challenging the task of getting things just right is, many opportunities for exploring rental properties for investment could be much closer than you think. If you are able to systematically assess investment properties, pretty soon you will have a heap of opportunities on your desk without enough time to go through all of them. Remember to be patient with your selection. No matter how good a deal you think an opportunity is, there will always be another deal just as good or better available.
“Sometimes the best investments are the ones you don’t make.” – Donald Trump
Here are 6 avenues to start looking for property investment opportunities.
1) Classifieds. Pick up the newspapers on Saturday and you might find the Classifieds section as thick as the main newspaper section itself. Inside you will find hundreds of listings that are categorized by districts and towns. The intention of real estate agents for listing these properties are not necessarily to sell you that listed property. They are collecting a list of prospects to market to as well.
Look for descriptive words like “rental opportunity”, “good value”, or “well maintained”. These are the type of language commonly used to describe older properties in mature neighbourhoods. Take the time to call up the agent. Even if the specific property does not meet your criteria, the agent might have a whole portfolio of similar listings under his care. Agents usually specialize by niches like particular property types, commercial properties or specific towns. As agents also make a commission cut by co-brokering, they will also try to refer you to colleagues who have a basket of property types that you are looking for.
A small segment of property owners put up advertisements themselves as “For Sale By Owners” (FBSO). FSBOs often fail to recognize the added value from hiring property agents. And because of this, they also fail to recognize their property’s true value. Many do not have the slightest clue what is a fair price for their homes and are just benchmarking their asking price to recent transactions in the vicinity. With experience, you will be able to quickly see if an inexperienced owner is asking for a price below retail. However, do not that this plays both ways. FSBOs could be oblivious to the market, or they can be true experts of that market and require no help from agents.
If you want to go for the classifieds pro-actively, consider putting up an advertisement stating what you are looking for. If you want to avoid calls from agents, just state so in your listing.
2) Magazines. Real estate is big business. You are always going to find local magazines that focus on local real estate. Although a lot of these magazines just serve as a platform for developers to showcase their latest projects, there are usually sections for real estate agents to advertise their listings. In some cases, there will also be FSBO sections. Remember that you objective is to find rental properties with good return on investment (ROI). Not a new pricey property with a glittering artiste impression. In magazines that focus on a specific niche like real estate, you might also find service providers that provide services that you never knew existed. Magazines are always a good place to find opinion and commentary instead of just reporting the news.
3) Internet and mobile apps. Technology has changed the world very drastically in the last 2 decades. 10 years ago, what we can do on our mobile phones now seemed like a fantasy movie scene in Star Trek. 20 years ago, the internet was yet to be commercialized. Now, a world without internet and mobile technology will feel like going back into the ice age. Real estate media has jumped on the bandwagon to make listings easily accessible. There are mega websites and fully functional mobile apps to help you with property search.
But as there is money to be made, a lot of portals and apps carry too much featured advertisements that you might never find what you are looking for. Or you might spend half the day just to finally locate the right page to key in your search. They constantly throw up advertisements in your face or redirect you to webpages that are not remotely close to what you are seeking. And as there is killer competition for eyeballs in these media, listings are prone to misleading information that are not verified by the websites or app owners. All misleading information have the one objective of capturing your attention and calling up the person who put it up in the first place. Your contact information might then be put into an email blaster or sms blaster. And due to the anonymity of the internet, you never know whether you are dealing with a genuine party or a scammer.
Even with the drawbacks stated above, the internet is a great place to find information and conduct research. But do take listed prices that look attractive with a pinch of salt. 9 times out of 10, you will probably find that the listed price was never available and just a bait for you to call up.
4) Banners and signs. If you have a walk around town centres in your neighbourhood, you will find that real estate agents buy up a lot of advertising space in the form of advertising boards and banners to promote themselves and their services. As most people who see these signs probably reside in the area, the banners directly reach out to this target segment. Nobody says that you cannot put up an advertisement yourself. If you have identified a town where you want to buy into, consider buying these advertising space in the town centres. Almost everyone who lives in the area has to visit the area for transit, shopping or leisure. These ad space must be working for real estate agents when they continually buy up space to advertise themselves.
5) Real estate agents. Every investor with an expanding portfolio will have many agents working for him. You should start building relationships with real estate agents as well. And you want to work your way up their preferred customer list where you are always one of the first to get wind of a good deal. This point is best explained here.
You can also consider hiring a real estate agent to be an active scout for you. The fact is a lot of people are unable to see the real value that real estate agents bring to the table. They are more than just middlemen who refers a buyer to a seller. They are masters of marketing and exposure. They network with a host of other agents and can quickly put up listings in multiple channels of media with a push of a button. We are of course talking about the competent agents.
6) Masterminds and networks. There are a lot of private investor groups and networks where investors come together to share and learn from each other. These networks usually meet up weekly, fortnightly or monthly. Since every investor will likely have his own professional network, sometimes good deals can be passed around as there is only so much any one individual can stomach. At times, international property marketers only reach out to these networks as the properties they are marketing does not have mass appeal. You might even have a chance to take part in a mega group buy.
The advantages of joining one or two of these networks also include the occasional high profile speaker who come to share experiences with everyone. With a close group of like-minded people to learn from, masterminds and networks are one of the best places to find property opportunities and learn the trade of investing. However, be mindful of differentiating between genuine networks and those that are just trying to sell you something.
As a parting word, always remember to practice logic and avoid letting your emotions get the better of you when buying rental property.