What do buyers look for in a home they are looking to buy?
It depends on who the buyer is. The criteria are usually different for people who are purchasing a home to use it as their primary residence versus people who are buying a home to use it as a rental property.
For the majority of buyers who are buying a home to live in, most of the things they look for in a potential home are those things that qualify the property as their dream home. Even though the cost of buying and maintaining the home are important considerations, the status that the home confers on them sometimes ranks above all other factors.
For such buyers, the buying process is more subjective than it is objective. Their buying decisions are influenced by things like a granite countertop in the kitchen, hardwood floors in the living area, and a nice outdoor room the previous owner added. The amount of comfort their family will get from living in that home is the most important factor in their decision.
This is totally different from how property investors approach the purchase of a potential rental property, explains Pro X Property Management. Property investors employ cold calculations. They will crunch the key figures that reveal the financial performance and future prospects of the property. It is on the basis of the outcome of those computations that they determine if the property is a good investment or not.
Property investors look at a potential rental from the point of view of how much money it will make and not how comfortable it is. The things that make a home attractive to a homeowner will often disqualify that same home from consideration by an investor. Knowing the different needs and expectations of these two types of buyers is vital when trying to sell a home.
Tips for selling an investment property
Typically, your main target when selling a rental home will be other investors like yourself. What should you do to fast track the sale of the property?
1. Keep your costs low
Ideally, you should have launched your plan for selling the home many months, or even one year, before the date when you plan to list the home. This is to allow you the time to bring the operational cost of the home as low as possible.
Normally, one of your goals as a landlord should be to keep the cost of running the home low, while pushing profits upwards. If a potential buyer sees that they can start making money on the home from the get-go, you are more likely to offload it faster.
2. Choose your price strategically
Property investors are very sensitive to price. Every investor wants to buy below market value in order to keep their mortgage payments low. Buying below market value also means they can maximize appreciation of the property.
Pricing the home a little below its actual value will save you time and money. You will maximize buyers’ attention, cut the carrying costs on the home, and reduce the stress of waiting for a buyer.
3. Understand the rental market in your location
Any potential buyer will be expecting you to educate them on the merits of the housing market where the property is located. If you have operated this rental for a decent period of time, you should have understood the market.
One of the information potential buyers will request is a list of the region’s characteristics that will make renters want to live in the area. They will also want to know the upcoming developments in the area, as well as other relevant information about the location.
4. Have records of your rental income
Prospective buyers will want to see the finances of the rental. There is no better way to market a rental property than to show proof that the home is making money. Access to this information will make it easier for buyers to reach a decision; you will be helping them to reduce their risks.
This information will also give you an edge over other sellers who don’t have up-to-date financial records. Some of the information you should have in your records include rental growth rate, renovation records, maintenance and repair history, roll rent, and expense sheet.
5. Find an experienced real estate agent or reputable home buying company
An agent or home buying company who has experience buying/selling investment properties will make your work easier. A competent estate agent or home buying company won’t limit their role to just marketing your property. In addition to helping you advertise the home, the agent or home buying company should serve as an adviser.
If you involve your estate agent or home buying company early enough, he or she can help you with many of the items discussed above. One of the areas where their help is invaluable is in deciding the price for the home. The network of estate agents and investors brought by experienced professionals will make it easier to find a buyer fast.