The market is tight. It is hard to find good rentals investments.
Finding deals that turns into rentals with good rates of return are even harder.
Fight the temptation to give up searching and pay more. Here are 5 ways to help find the deals when the inventory is down.
1. Check the County Tax Records
-Identify what your ideal property is coded by in the tax record.
-Find properties that have sold a certain amount of years back. Likely things will have changed for owners over the years, and they may be ready to sell. People who bought in years 2006-2008 likely had negative equity for a while, but now have recovered and may want to sell to get out of the property.
-Send a letter letting them know you would be interested in buying. The tax record has the mailing address of owner.
2. Develop or Convert
In a low inventory environment like current market, creating units is a need in the marketplace.
-A easy place to look is along busy road, where the zoning likely allows a greater density and more flexibility. Find larger homes and convert to several units.
-Find vacant land and build economically. Most builders will charge a premium to supervise a build job, making the numbers to high for a good return. This can be avoided if you have the knowledge to supervise it yourself. Be prepared to deal with very busy contractors, as they are all in high demand.
3. Predictive Analytics
Realtors use a a method called ‘Predictive Analytics’ to digitally watch for cue signs that a sale might be taking place soon. If a person goes online and searches ‘Home Painter’ or a similar term, that data can be purchased. The statistics show that someone who searches for certain key words will likely sell within a short period of time.
Match up with a realtor who uses this marketing, and they can match your criteria to any coming inventory in the marketplace, to get you in a first priority.
4. Go Farther
Be willing to look in a more rural area. Because of the high demand, many renters are looking in more rural areas to find rentals. These properties can be purchased at lower prices and make better returns possible.
For the renters coming from more urban higher priced areas, these rentals look like a bargain, but still cash flow healthily.
Look at the areas within a reasonable commute to major employment draws and attractions.
Know someone who is retiring and selling portfolio? Your investor buddies can pass on deals to you that they may not have the resources to take on.
Let your sphere know that you are an investor. Before you know, people will be coming to you.
In conclusion, making an effort to explore all options will yield you a portfolio that will love you back for years to come. Call us for a consultation on how to build your strong portfolio. Naomi 717-819-2825