The real estate business is one of the most lucrative fields today. From renting to leasing or buying properties, the world is growing at a swift pace. Real estate marketing is, therefore, very crucial for any agent or investor in the industry. You should invest in both online and offline marketing to ensure no market is left out. In this article, you will find some of the creative ways to market your real estate business.
Create a Professional website
You mustn’t create just any website, but a professional one, especially if your focus is on moving property. Ensure that your website is appealing and accessible. The quality of content on the website should encourage visitors to want to see more. Avoid stuffing it with too many ads, and nobody wants that. You can as well include listings on your site and make sure to keep them updated.
Get Social Media Marketing
Make use of all social media platforms such as Instagram, Twitter, and Facebook. Research from the National Association of Realtors (NAR) shows that 92% of real estate customers first use online platforms before consulting an actual agent. So make sure your social media pages are active and highlighting what you are offering. You can even engage social media influencers to help with marketing.
Engage Local Television and Radio Stations
With this, you are sure it will reach the target audience, but make sure you do it right. If you choose to advertise through television, make sure it is one with a large viewership of your target audience. Use appealing and quality images to show your clients what you have. If it is through the radio, give precise details of your location and properties. Do not forget to leave contacts in both.
Start a Blog on Matters Real Estate
If you are a real estate agent or investor and still do not have a blog on the topic, you miss out. It would be best to start a blog to give more details about your services and engage with your potential clients. It is a great way to interact with people and know what they need. From the blog, you can link your website where potential clients can find you.
How do you know if a house is a smart investment or a good property to flip? You may be looking to acquire properties for your portfolio. The problem is it can be a struggle to identify good deals quickly. Read on to learn how the 70% rule will help you.
The 70% Rule is a Simple Rule of Thumb.
Investors and flippers should use the 70% rule to determine whether to buy a property. The rule states that you should only pay 70% of the after repair value of a home.
An example would be a $175,000 home that needs $10,000 in repairs. After repair, it would be worth roughly $200,000. A flipper or investor should only pay 70% of that. The total they should pay is $140,000 for the home.
This protects them from overestimating the value of the home. It also protects against downturns in the market.
Speculating that a property will increase in value can be very dangerous. Seasoned investors prefer to make money when they buy to minimize their risks. This also protects them in case they missed something.
Other Factors To Consider For the 70% Rule.
You should also consider a few other factors. Settlement costs, financing costs, and carrying costs take a large chunk out of the deal too.
Closing costs on a $200,000 property could easily be 2 to 5% of the property. This means it would be up to $10,000. Financing costs would likely be around $5,000.
You should subtract $15,000 from your offer price to account for these factors. Some sellers may not discount the whole amount. It is better to get some of these off the cost to protect your margins.
Exceptions to the 70% Rule
The 70% Rule is a simple rule of thumb for finding rentals and flips. It is only a starting point. There are other circumstances where you might want to ignore it.
One of these cases will be if you’re holding the property long-term. Then, you would not spend as much on renovations.
You would be more concerned about the cash flow. Getting a good deal would still be necessary. A better price will still allow you to get lower monthly payments. Lower payments will help you with cash flow.
Take the time to determine your situation and goals. Are you looking to get quick cash? Other times you’ll be looking for steady returns over the long-term.
The 70% rule is a good rule of thumb. You should always be cautious with your repair and closing costs. It is a good starting place to protect your profits.
An essential skill in making a house flipping profit in the real estate business is knowing how to value a house properly. For individuals who are in the industry to make profits from low purchases. Here are ways to determine worthy homes to flip.
Average Value Determination: The house post-rehab value is determined by considering the cost of the houses in the general vicinity and the price of recently sold homes similar to the post-rehab vision. The final worth after repairs is the value you use for determining the worth of the house.
Standard cosmetic rehab: A general rule to estimate repair costs is $20 for every square foot. Based on this assumption, adjustments can be made upwards or downwards depending on the individual house’s specifications. This value will help determine whether to select the house for flipping.
Transactional expenses: Purchase closing costs are usually paid by the seller and account for 0.5 percent of the purchase price. The selling closing costs range between 1-6 percent, with an additional 1 percent as attorney fees. Holding costs such as property taxes, insurance, utilities, and maintenance costs should also be considered.
Offer price-setting- There are formulas to determine what offer price will be stated. One way is to get 70 percent of the average repair value deducting the repair costs. Another way is to subtract the repair costs, closing and holding expenses, and desired profit from the ARV to get the right offer price.
Geographical setting: Proximity to facilities such as shopping malls, transportation services, and school increases the property’s value while highways and airports decrease it. Different locales may have various school taxes, municipal and private trash collection companies with different days.
Physical attributes: As much as the seller wants the house to stand out, it shouldn’t be so significantly marked up in features that it overshadows the neighboring houses. It will only lead to a scenario where it will be too costly for that neighborhood. The most successful house flips are those that have the most work. However, if structural issues are suspected, it would be wiser to buy a house in better condition.
Lenders- Rehab lenders give between 65-70 percent of the ARV. This factor is because an investment is made with the anticipation of making money in the end. If the lender advises otherwise, then there will not be enough equity for the investing party to make money in the end.
If the S&P CoreLogic Case-Shiller Home Price Indices are anything to go by, then the West Coast real estate is experiencing a boom. More home buyers are looking to Phoenix, San Diego, and other West Coast cities for the best real estate opportunities. If you are an investor, what are the top 3 spots to consider for real estate investment at the West Coast? Check them out below.
San Jose is a high-income capital of Silicon Valley with an excellent history of long term investment opportunities. Here, home values are some of the most expensive in the United States. Yet, the San Jose market is currently a buyer’s market with some of the most successful high-tech firms on the listings. In turn, sellers are willing to accept the asking value or below. Zillow estimates the median prices for San Jose at $1,002,873. The last ten years saw the industry appreciate by 77.36%.
In the Los Angeles area lies Hawthorne, a hidden gem for rental properties. Up to 70% of the residents here own or live in rental units. In turn, expect a high and steady rental income from your investment. The average monthly rent stands at $1,736. Typical neighborhoods with rental values are on an upward trend of as high as 194%, including Delta, Washington Ave/W135th St, and Del Aire. Plus, most home sizes fall in the two bedrooms’ apartment complex category.
When you are looking for an affordable real estate investment opportunity on the West Coast, get to Anaheim. With a median price of $685,000 and an appreciation rate of 41% in the last three years, this buyer’s market is popular with single-family homes. Further, it is a favorite tourist spot home to attractions like Disneyland that push up the rental income of the houses. Average mortgage costs stand at $2,535. Then, expect the sellers to lure you with competitive listings as they tap into the lower demand.
Other prime real estate spots at the West Coast include east of Los Angeles as you get to the Interstate 710, Portland’s’ rental units that are popular with students, and Oakland that is now appealing to a higher class of tenants. Then, liaise with an experienced broker who will take you through the steps of owning a part of the West Coast today.
The liquid rate that an asset is converted into cash determines how easy you can enter or exit an investment. Time is a central factor when investing, and liquidity determines how much time it takes to get your money once an asset matures. Liquidity even helps when taking money out as the market shifts against you. As long as you decide on the liquidity of your investment assets, you can exit your positions according to a strategy that fits you.
When Market Assets are Liquid
Liquid assets are investment instruments that convert into cash with relative ease. The quality of the asset isn’t determined by its liquidity, however. A liquid investment can still present unsatisfying returns, though, it’s easy to get in and out of. Here are some factors that determine the liquidity of an investment:
- Market Participants:
The more people that are involved in buying and selling, the more likely it is that you can close a transaction when you need to.
- Transaction Size:
Large-buy orders, for example, can help clearing agencies, for the bulk of orders can accommodate the market’s sellers.
- Daily Turnover:
The number of transactions play a role, for even when the participants are few, the constant trade orders sustain opportunities for entering and exiting.
- Economic News:
Positive and negative news influences the liquidity of an asset. Positive news can lead investors to flood a market and make buying difficult. Sellers can, likewise, enter the market to make buying easy.
Factors that Establish Illiquid Conditions
An illiquid asset is one that you can buy or sell but with a longer timeframe needed to complete an order. Factors that lower liquidity are determined when you buy or sell.
- Long Term Investments:
The timeframe that someone holds an investment within dictates how long the market takes to acquire or sell an asset.
- Market Prices:
The higher that prices are, the fewer the buyers will be. Prices that go lower allow more participants to get involved and actively trade.
- Market Closures and News:
Bad news, for example, when a company goes bankrupt, can force you to hold an asset longer that you intend to.