“Opportunities are never lost. The other partner takes the ones you miss.– Anonymous
Often finding or creating great real estate deals is nothing more than figuring out what the problem is and fixing it. Here are five of the most common real estate problems and some ideas to solve them:
1. burned landlord
Being a homeowner can be stressful and exhausting. Choosing just one bad tenant can make your life miserable. And, if you don’t have a clear set of goals or an easy-to-follow strategy, it’s often easier to quit.
An exhausted and frustrated landlord is done dealing with his property problems. All he needs to do is find them and offer an easy solution to their problems. Most of the time this person will think that the only way out is to sell. But, in today’s troubled market, they stand to lose money on that sale. Their real problem is dealing with bad tenants… if it’s a good property, you could offer to be a partner in the deal. Maybe get a 20% ownership interest simply for taking on the role of property manager? There’s no investment of money on your part, just some time, sweat, and effort to get rid of terrible tenants, put in some new ones, and take the occasional call.
2. Higher and better use
Most investors only look at a property for what it is. . . but you can see what COULD be. In cities where the vacancy rate is low, the city is often eager to add more units to the rental pool to make change approvals easier. Find a home with a foundation that can easily be converted to a suite. Or, if you’re more ambitious, find a home that can be raised, extended, or knocked down and converted into a multi-unit property. This takes work, tenacity, and an understanding of city planning (and permitting), but the payoffs can be big, especially if you have helpful friends and family or just a good relationship with a few contractors.
3. Find properties that need love
With the number of foreclosures on the rise and more and more sellers in distress, now is the time to find properties that need love. You do want to find the ones that just need cosmetic love, though – the ones with a lot of internal issues will be expensive and time consuming to fix. Look for properties where the lawn has been overrun by 2-foot-tall weeds, newspapers are piling up, and the lights are never on. These properties may be close to foreclosure or simply have an absentee owner who thinks there is no market to sell.
4. Be a better property manager
Reduce costs and increase income from the properties you own. Energy-saving light bulbs, low-flush toilets, and making sure windows and doors seal properly are all things you can do to be kind to the environment while reducing your property expenses. However, if your tenant pays the bills, it is an additional selling point and can help you retain tenants longer at the highest possible rent in your market.
To increase revenue, you can charge for parking, rent your garage separately, rent a storage locker separately, and charge for laundry services.
5. Be a better salesperson
Almost everything you do in real estate involves sales and marketing. You can make better deals by being a good negotiator. You can find better tenants and get higher rents by understanding marketing. When you find a deal and negotiate it, you’ll be using your best sales skills. When writing ads to attract tenants, you’ll be using your best marketing talents. The key to all of this is to focus on the other person. Find out what the problem of the person you are negotiating with is and know the solution. Determine who your ideal tenant would be and write an ad that appeals to that type of person.
Of course, there are plenty of other ways to make money from rental properties, but most of these problems can be solved quite easily – you just have to know what to look for and pitch yourself or your business as the solution!
