1. Landlord Burn Out
Being a landlord can be stressful and tiring. Picking just one bad tenant can make your life miserable. And, if you don’t have a clear set of goals or an easy to follow strategy, it’s often easier to throw in the towel and run away from your real estate investments.
Find the frazzled and frustrated landlords, and solve their problem. A frazzled and frustrated landlord is done dealing with the troubles of their property. Most of the time this person will think the only way out is to sell. But, in today’s troubled market they may lose money on that sale. Their real problem is dealing with the bad tenants… if it’s otherwise a good property, you could offer to become a partner on the deal. Maybe you get a 20% share of the property for just taking on the role of property manager? No money invested on your part, just some time, sweat and trouble to get rid of the terrible tenants, place some new ones and take the odd call.
2. Increase the Density
Most investors just look at a property for what it is . . . but you can look at what it COULD be. In cities where the vacancy rate is low, the City is often anxious to add more units to the rental pool so approvals for changes should come easier. Find a house with a basement that could easily be turned into a suite. Or, if you’re more ambitious, find a house that could be lifted, extended or torn down and turned into a multi-unit property. This takes work, tenacity and an understanding of city planning (and permits), but the payouts can be big, especially if you’ve got handy friends and family or just a good relationship with a few contractors.
3. Find Properties that Need Love
With the number of foreclosures on the rise, and more and more distressed sellers, now is the time to find properties that need love. Look for properties where the lawn has been overtaken by 2 foot high weeds, newspapers are piling up, and the lights are never on. These properties may be close to foreclosure or just have an absentee landlord that thinks there is no market to sell. Write down the address, stroll on over to the local municipal office and look up the owner’s name and address. You may just someone that is really happy to hear from you. You could be saving them from foreclosure or just taking over a property they don’t have time to deal with. You might even find an older person who has moved into a home that would be willing to give you financing on the property as a stream of income for them to use to fund their retirement expenses. You just have to take that extra step to investigate so you can find out what is the problem that needs solving.
4. Be a Better Property Manager
Lower costs and increase revenues on the properties you own. Energy efficient light bulbs, low flush toilets and ensuring windows and doors seal properly are all things you can do to be kind to the environment while reducing your property expenses at the same time. Or, if your tenant pays the bills, it’s an additional selling point and can help you retain tenants longer at the highest rent possible in your market.
To increase revenues, you can charge for parking, rent out your garage separately, rent out a storage locker separately, and charge for laundry services.
5. Be a Better Marketer
Make sure you’re following the marketing basics . . . the 4 P’s of marketing a property for sale and for rent.
Product: First of all, make sure your product looks its best when you market it to a renter (or to a potential purchaser if you’re selling). Don’t show it with a promise to fix it up, show it in its best condition. You wouldn’t go out on a first date smelly and wearing last nights clothes would you? Don’t let the first impression of your place be a worn and unloved property. Clean it, paint it and make it smell nice.
Price: Know what your competitors are selling for and price yourself just a tiny bit lower. If you are renting your place out, even $10 less per month is slightly more appealing and will get you looked at. Make sure you’ve done your research though. Do not price too low or you will be leaving money on the table.
Place: Sell the benefits of living in your place – sell the place! Make someone want to live there with your property descriptions. “Easy five minute walk to trendy College Street restaurants and shops†sounds much better than “1/2 mile from College Streetâ€. “Warm and bright main floor unit opens up to back yard and front porch†is so much more appealing than “access to backyard and front porch from this main floor unitâ€.
Person: Pick a person to sell it to. This is very important. Most people will just try and rent or sell a property to anyone. And really, to market anything, you need to know your target market. Is it a student? If it is, you’ll emphasize different aspects of your unit than if it’s a family or a downtown professional. Think about who the ideal or most likely prospect is and sell it to them with phrases and features that will appeal to them!
