Selling Rental Properties to Homeowner Clients
Since rental properties are in high demand, you may want to approach your established homeowner clients with listings that are suitable for rental properties. Or a client may be interested in a multi-unit purchase, keeping one for their own use. You may even be able to manage this property for them and increase your income. Here are a few points to share.
Ideally, a second property's rental income will cover its mortgage payments. This is why a potential buyer needs to consider all of the potential costs, including repairs, insurance, taxes and any management fees, before making a purchase.
A high FICO score, down payment and cash reserves are needed. This is because a rental property will not be occupied 100% of the time by paying renters, especially when the owner is carrying out repairs between leases. In addition, mortgage insurance won't be available - this makes a 20% minimum down payment mandatory.
Return on investment (ROI) is important. Owners of rental properties often enjoy tax advantages and added cash flow, but these need to be balanced by the right type of mortgage that keeps ROI acceptably high.
Multi-unit buyers may qualify for government-sponsored loans. If your client plans to live in one of the property's units, the FHA and VA offer financing for properties with up to four units.
Contact me to learn more about financing for rental and multi-unit properties, so you can share this intel with potential buyers with confidence.1
Get Creative with Your Marketing at TikTok Academy
Since TikTok first gained popularity with teenagers sharing dance routines, you may have not considered adding this app to your social media.
Or perhaps you haven't had the time to learn how to best use TikTok's features. If either of these apply, or you're simply curious as to what's on offer, it's worth setting up a free account at TikTok Academy.
After you set up an account, you'll be taken to the initial course, TikTok 101. This is presented in several modules, and you can stop and start each one as your schedule and attention span permits.
While plenty of TikTok users are simply having fun, there are TikTok for Business tools for you to put to work. Learn how to adapt your marketing strategies to this platform, and even monitor your performance.2
Why Median Home Prices Are Meaningless to Buyers
When a prospective home buyer reads the real estate news, they're often confused about articles that talk about median home prices. Help them navigate these headlines and decide whether it's the right time for them to buy.
One factor that causes confusion is that different home sales reports use different formulas. Some report median sales price while others use repeat sales prices. Since recent median price data says prices are down, while repeat sales prices show the opposite, they tell buyers different and confusing stories. To further buyers' confusion, since lower-priced homes are popular with buyers now, this has caused the median price to decline. But it doesn't mean that anyone's home has lost value.
Instead of worrying about median prices, it's best to recommend that buyers calculate an affordable monthly mortgage payment before they begin viewing your listings. This is something I can help them with, together with introducing them to mortgage products that fit their needs.3
Home Buyers Occasionally Frustrated but Still Picky
Since your territory may be suffering from a shortage of homes for sale, it's easy to assume that a buyer will snap up any property that generally fits their needs.
Sellers also tend to share this view. However, a recent homeowner insights survey found some interesting intel that sellers should keep in mind, including these points.
- An estimated 77% of potential homebuyers won't consider buying a home that isn't move-in ready.
- Some 67% of potential homebuyers say they only consider homes with updated features and layouts.
- Roughly 68% of potential homebuyers say the biggest dealbreaker when buying a home is disrepair and wear and tear.
Sellers who are prepared to renovate for a faster sale may be better-served by concentrating on the following projects, which are pulling in the highest Return on Investment (ROI) numbers.
A kitchen refresh, always popular with buyers, is generating the most ROI. For example, if a seller invests $15,000 to update a kitchen, they may be able to sell for up to $71,000 more than with the original kitchen. Bathroom renovations also perform well.
Other high-ROI renovations include:
- Refinishing hardwood floors: 348%
- Basic listing prep (interior electrical updates, minor fixes): 297%
- Roof replacement: 288% Carpet replacement: 280%4
Learn Virtual Staging the AI Way Sources: 1smartasset.com,
2tiktok.com,
3keepingcurrentmatters.com,
4themreport.com,
5blog.hubspot.com
You've probably been through the traditional staging process plenty of times, dragging furniture into a home to increase its appeal to potential buyers.
While this was always worth the aching back and hours of time, virtual staging has come into its own. Even better, you have several options for virtual staging with the latest AI applications.
However, don't assume that all you need to do is to download an app and begin decorating. Design is equally important, whether you go for traditional or AI staging. Creating the ideal look may be time-consuming, as you'll need to learn the latest interior decor trends before learning how to use a virtual staging app. This is why you may want to go with an AI staging service that charges per photo.
Shopping for a virtual staging application or service is easy online. Be sure that your shortlist contains apps or providers with the features that are most important to you. For example, some AI staging providers specialize in certain properties, such as luxury homes or condo units.
Want to experiment with staging AI apps for free? Check out HomeStyler or Housecraft for your iPhone or Android phone.5
Recent Comments