Purchasing property below market value is a popular way for investors to generate excellent returns. Unfortunately, finding such discounted properties has become increasingly difficult in recent years due to rising housing demand and increased prices. However, deals can still be found by investors who exercise patience and diligence to acquire the right property at the right time.
Here are five strategies to help maximize your chances of securing one of those elusive deals:
Find a fixer-upper: One long-standing way to secure a real estate deal is to buy a property that requires time and attention. A property in poor condition will typically be sold at a low price, allowing investors to fix it and sell at a much higher price later or charge higher rent. This type of investment is perfect for property owners who enjoy renovation projects but isn’t ideal for landlords seeking a property ready for tenants.
Look outside your local market: Managing rental property from a distance is becoming easier thanks to technology like virtual tours and online rental payments. So, if your local real estate market isn’t producing the deals you want, consider looking elsewhere! Different economic factors influence each market, and broadening the geographical scope of your search might be what it takes to land an advantageous investment.
Get others involved: If performing the groundwork for real estate deals sounds too labor-intensive, you can always hire a realtor to keep an eye on the market. Or consider how your network of local professionals and friends might aid your search. Other real estate experts like wholesalers, property managers, or contractors might be able to share unique insights into properties going up for sale, especially if they know what you’re specifically seeking.
Scout out foreclosures and auctions: Properties sold in foreclosure will likely be some of the best deals, especially if you’re first in line or snag the property during pre-foreclosure. You can find foreclosures through wholesalers, in public records, and on websites like Trulia, Zillow, Mashvisor, or Foreclosure.com. Auctioned properties are also likely to be sold below market value. However, in this case, the property must be paid in full on that day and accepted as-is with no inspection contingencies.
Think outside the box: If there’s a specific city center, neighborhood, or suburb you’re looking to invest in, try driving around! Take note of any properties that look abandoned or neglected, then research the owners and send an inquiry if appropriate. Or be on the lookout for discounted properties in newspapers, Craigslist, or local Facebook groups that might not appear on the more commonly used listing sites.
Remember that no matter how good a deal may seem, always prioritize research. Not every fixer-upper will reap a profit following repairs, and just because a property is in foreclosure doesn’t guarantee it will generate good returns. When you find a deal worth the investment, knowing ahead of time what types of loans and mortgages you qualify for and how much capital you can access will put you in the best position to act quickly.
About Rentals America
Rentals America provides full-service property management for residential rental properties. Our team is completely dedicated to property management, and we’re here to help landlords navigate the rental market.
