However, just because the market is particularly competitive doesn’t imply you can’t proceed with your plans to buy a rental property. However, it does indicate that you may need to know a few tips to do so successfully. In this section, we will discuss more deeply how to expertly navigate your way through buying an investment property in a seller’s market.
Overcoming the Challenges of a Seller’s Market
When more buyers are looking for properties than people are willing to sell, rental property investors may face some serious problems. Listings often remain on the market only for a little time, bidding wars are expected, and properties can usually sell for a lot more than the asking price. It also can make sellers less willing to negotiate or offer any incentives because their property is likely to sell quickly anyhow. To surpass these challenges, here are a couple of things you can do to get your hands on that next investment property:
- Focus on Neighborhoods. No two markets are precisely alike, and the same is true of neighborhoods. In a seller’s market, search for neighborhoods with available properties that are expected to see continued increases in rental rates. An ideal location might be much more valuable than buying a bargain-basement deal on the property itself.
- Pursue Off-Market Properties. When listings are sold only after a few days on the market, it’s advisable to utilize alternative strategies to keep your investing on track. One of these strategies is to look for off-market properties. You can locate this by communicating with local property management companies, other rental property owners, or real estate agents with local expertise. This is where having market experts like those at Real Property Management Three Bridges can give you a competitive edge!
- Crunch the Numbers. Since residential properties are not expected to sell below market value in a seller’s market, it is important to thoroughly examine any property you are considering purchasing. You must also think about the possibility that you may end up paying asking prices (or above) and ensure that the margins still work out in your favor before making an offer.
- Get Pre-Approved. In a competitive market environment, you must move quickly once you do find a property you want. Getting your financing in place and ready to go can help give you an edge over other buyers, particularly if you have pre-approval available and have worked with a specific lender By showing your seller confidence in your capacity to complete the sale, they may be more inclined to choose your offer over someone else.
Purchasing an investment property in a seller’s market can be a challenge, but implementing these and other suggestions can help you succeed. If you’re ready to make a start and buy a rental property, Real Property Management Three Bridges can help. Our St. Charles property managers have the local market expertise and exclusive information on off-market properties to help you find a profitable investment property. To learn more, contact us online today!