By Meghan Belnap
Real estate investors need to have their finger on the pulse of their real estate market. The minute it looks like the market is going south, these investors may conclude it's necessary to sell off their latest home acquisition to regain the capital they need for the next great deal.
The trick is to know which properties to have in play in a bad market. Here are a few tips that'll help to shed some light on this tricky subject:
Curb Appeal Is Always a Plus
Even in a bad market, buyers want the homes that look great. If you're trying to move a property that doesn't look great from the outside, it may be necessary to improve that home's curb appeal to increase its desirability. Sometimes this requires nothing more than a little yard work and a fresh paint job. It's important to sit down and decide what features need to be tweaked to really make a home catch the eye of a potential buyer.
School Zones Are a Good Option
If the market outlook doesn't look good, then look at the properties in one or more local school zones. Families with kids are always looking for homes for sale near a decent school. Sometimes people with kids have to move into an area because of work, so they'll be on the lookout for properties for sale that they believe will be the best place for their kids to grow up. School districts tend to be what many parents consider the biggest factor for moving their children to a certain area no matter what the local market is doing.
Look for Rental Potential
In a bad market, investors look for excellent deals to lock down. Rental properties that fetch decent monthly income are attractive to these buyers. Picking up rental properties can be a game changer when you need to move a home quickly in a bad market. This works even better if an investor already has an extensive list of other investors to whom they can pitch properties.
Can You Turn a Profit at a Discounted Price?
In a bad market, it may be impossible to get top-dollar for a property that needs to make its way out of an investor's portfolio. Sometimes getting full market value is simply not in the cards. However, if the investor can discount the price of the home and still turn a profit, then that would still be an acceptable outcome.
It's often challenging to sell homes in a bad market. With a little hard work, though, it's still possible to find buyers who will pay the price a seller is asking. Once the sale has been transacted, the incoming capital provides an investor with the money they need to look for new investment opportunities. These kinds of situations should remind investors that they should always have a viable exit strategy in mind!
Meghan Belnap is a freelance writer who enjoys spending time with her family. She finds happiness in researching new topics that help expand her horizons. Looking for a home in the Pueblo, Colo. area? Belnap recommends working with RE/MAX REALTOR® Meagan Kroeze.