3 Ways to Make Your Investment Property Stand Out in a Crowded Market
Amazon’s highly publicized search for a location for its second headquarters recently highlighted a theme property managers know all too well: In a world where supply can't be added overnight, making yourself stand out in a crowded market can be a challenge.
The good news is that with strong baseline demand, there is likely clientele that is looking for exactly what your rental properties offer — you just have to identify and publicize those differentiators.
The Battle for Tenants
Many property managers have observed an increase in renters. In cities like Los Angeles, Miami, Seattle, Las Vegas, and Boston — where housing prices are skyrocketing — it’s more affordable to rent than it is to buy. According to ATTOM Data Solutions’ 2019 Rental Affordability Report, it’s cheaper to rent a three-bedroom property than to buy a median-priced home in 59 percent of U.S. housing markets.
That’s good and bad news for property managers. The good news is that there is a bigger pool of potential tenants in many cities. The bad news is that as more property investors flock to these areas to capitalize on the booming rental market, you’ll face stiff competition as you fight for renters’ attention (and dollars).
Potential tenants naturally assess factors like transportation options, walkability, school proximity and quality, and crime rates when deciding on a new neighborhood to call home. Once they have a general idea of where they want to live, however, it’s your job to make your property stand out. Regardless of the market, the most qualified renters will have a variety of housing options available.
With that said, here are three things to keep in mind when looking to rent out a property:
1. Know your tenants.
What kind of people does your neighborhood tend to attract in terms of demographics like age and income? Are you renting to families? Young professionals? If it’s the former, a nice yard could add to your property’s appeal. If you’re renting to co-living Millennials, making sure the house can get easy access to high-speed internet to support gaming and video streaming is important.
It's worth noting that more consumers are beginning to consider smart technology for their homes. The safety, savings, and convenience that many connected devices provide can be a major selling point for landlords — especially if your property is in a “cookie cutter” neighborhood where most homes look similar (if not identical). Technology can be that differentiating factor that sets you apart.
Ideally, you want to identify overlap in the desires of people from different generations of renters. Once you've pinpointed areas of overlap, equip your property to meet common desires so that you’re appealing to as many people as possible at once.
2. Know the market.
If you want to stand out, you have to know what you’re up against. Sites like Zillow can tell you average selling prices and rental rates, but your best resource for obtaining actionable market data might be local title companies.
These companies are constantly producing detailed reports on closed sales, foreclosures, and other information you can use to get an accurate view of local market trends. And this data is the same information brokers will use to create listing presentations and their own market reports. Once you know what the competition looks like, you can be more strategic about pricing and the amenities you should be offering.
3. Know how to generate demand.
Creating demand for your property is a numbers game. The more eyeballs you’re able to get focused on your listing, the more offers or applications you’ll receive. When you do have those eyeballs, keep your pitch as concise as possible.
A good rule of thumb is to aim to convey your property’s unique differentiators in three seconds or less. Maybe your home can access blazing-fast internet and comes equipped with a smart security system and state-of-the-art refrigerator. In this case, your differentiator is technology. Alternatively, your home might have high ceilings and a big backyard — in other words, it’s spacious!
These descriptors can also give you a good idea of how to use SEO to ensure your property shows up in search results online. Do some keyword research to identify the terms and phrases that your ideal audience uses when searching for properties, and be sure to include those phrases in offline marketing collateral as well.
Selling or renting out real estate is more than a matter of supply and demand. Even in a seller’s market, you’ll have to work hard to get the best deal on your property. As long as you arm yourself with the correct knowledge, the fight to attract renters and buyers will be yours to lose.