Many of you may have been looking to buy a small (one to four unit) investment property recently. Prices have come down in many areas of the country, including some of the most up-and-coming areas. Combined with low fixed rate long term financing, these properties can make excellent investments.
How do you find such a property? Unless you are lucky enough to stumble upon a local Realtor who specializes in these and has taken the time to build a website, you may find (as I have) that the average agent does an extremely poor job marketing these properties via the MLS.
What are the Most Common Marketing Mistakes Made by Realtors on the MLS?
- Bad photography – I’m not going to beat a dead horse here, as you may have already stumbled upon sites like this one
For some reason, the REO agents tend to post the lousiest of photos, IMO. I can’t imagine what goes through their minds as they trod through a property and take photos of the least appealing aspects, frequently shot at a weird angle and with awful lighting to boot. We don’t need to see the toilet bowl or a pile of refuse in the living room. Please.
- Inadequate descriptions – Again, REO properties generally take the booby prize here. An investor needs to know the basics, just give it to us! And by “basics” what we mostly want is an accurate picture of the property’s financials. Is it currently rented? What’s the rent, taxes, and other fixed costs? How about a cap rate? Many times, if the listing agent can be bothered to post the cap rate, it is obviously wrong for one reason or another. More professional listings (such as those for larger apartment buildings) rarely neglect to provide these details. Why should the smaller investor be forced to dig to find this information?
- No video – An out of town buyer, in particular, would be thrilled to see a video of the property posted on Youtube or elsewhere. But even a local buyer can see if the property is worth viewing and thereby avoid wasting everyone’s time I should emphasize that, as far as investors are concerned, this does not need to be a slick professional production: twenty minutes with iMovie or another program would do the trick to edit a decent walk through of the property. If nothing else, a listing agent who seizes the initiative to post a short video would at least demonstrate to the buyer that the agent is going the extra mile to market the property.
Calling all listing agents out there – please do your job and make your client’s investment properties as appealing as possible, while providing the information investors need to determine whether the property is suitable. That should not be too much to ask.