Summer. It’s hot. The real estate market is also hot. It’s the time of year when everyone wants to buy and everyone is selling.
For real estate investors who want to get in on the frenzy, there are a few things that you need to know so that you don’t get caught up in the heat of the moment and make critical errors.
1) See Past the Curb Appeal
During spring and summer, properties look their best. Curb appeal will be at its absolute peak. Flowers will be blooming, grass will be green, and trees will be providing maximum shade from the summer sun. This is the time you should be taking pictures of your properties for listings! Knowing that this is prime home buying season, most sellers aren’t going to skimp on curb appeal.
If you’re property hunting, know that what you see will be curated to dazzle and impress, more so than in other seasons. But you can’t let that cloud your judgment. Looking nice and being good for your investment portfolio are two totally different things. Are you considering the numbers? The square footage and layout of the property? Is it really conducive to what you know renters in the area look for?
Keep in mind what your target audience is and what you want to have in your portfolio. This means choosing a property management company that believes in that curb appeal and presentation year-round. The best make it part of their mission statement.
Make sure you work with companies that refuse to manage junk properties in junk areas with little to no curb appeal. You want to target long-term, reliable residents and only the right properties managed the right way attract those residents.
2) Have Everything Ready to Go
If you’re going through traditional financing, having pre-approval is a must, especially in summer. This is a competitive season. There are likely going to be some elbows thrown over some good properties, and if you want to stay at the head of the pack, you’re going to want to have the advantage of pre-approval under your belt. It sends the message that you’re a serious buyer and, when faced with a motivated seller, it makes your bid more attractive with the knowledge that you can close quickly.
3) Recognize Seasonal Factors
Every season has its pros and cons. In warmer months, there’s a distinct homebuying con: a lack of moisture. This makes it a lot more difficult for buyers to determine moisture issues and damage in the property. Without a keen eye or property inspection, these problems would rear their ugly heads in a few months. You might wind up contending with mold, leaks, and more!
What you can do to avoid missing these issues? One, don’t skip the inspection. Two, know the warning signs yourself. Even during dry spells, the signs of water damage and drainage issues will remain. Look for water stains on the walls, floors, and ceilings. Warping and discolorations are tell-tale. In bathrooms and kitchens especially, keep your eyes peeled for signs of mold and mildew.
Outside, check for discolored patches of grass. Smell beneath the house. All of these are things that you can notice on your own without an inspector. In a busy home buying season, you can’t waste time. So if you can catch red flags on your own, catch them.
4) Get a Real Feel for Neighborhoods
During summertime, everyone comes out of the woodwork. It’s a great time to really scope out a neighborhood that you want to buy in. The neighbors are out mowing the lawn (hopefully), kids will be out on trampolines and on homemade slip n’ slides, and you’ll find people on their porches and working outside.
It’s easier to identify which homes are neglected (overgrown grass is easier to spot), and you can get a fairly quick idea of neighborhood culture. Lots of kids? Retirees? College students? Getting the low-down on the neighborhood through observation will help you determine if it will be a desirable place to invest. So do some detective work!
5) Don’t Bother with Minor Repairs
Contingencies can be a powerful tool in the home buying process. Negotiating them can also take up valuable time. While there are some major repairs that you may want to negotiate, as an investor who likely wants to win the bid and snatch up a property in a potentially competitive market, dedicating time to go back-and-forth with the seller over minor repairs is a waste of time and energy.
You’re likely going to do some repairs and renovations anyway, and taking a hit on minor repairs is a strategy that will get your bid noticed. So if you see potential in a property and you really want it? Offer to handle the minor repairs in your bid. The keyword, of course, being minor.
Naturally, you can remove many of those contingencies by purchasing with a reliable turnkey company. Take the word turnkey out of the equation and seek out companies with impeccable reputations and that have been in the marketplace for a long time. You are looking for companies that have built a reputation for handling the major issues and who seek to make your experience a phenomenal, wow experience.
They most likely are not the companies who will be willing to negotiate on price. But they are the companies who want everything…including the minor items to be perfect. Those are the companies you are looking for and those are the companies that have earned the right to call themselves turnkey! Written by Chris Clothier.
If you’d like assistance with finding great rental properties or property management companies, contact Currahee Property Solutions today at 210-941-1200.