When it’s time to sell your house or investment property, will you be ready? Do you know some of the pitfalls that may slow down the process? Do you want to make a big profit? And would you like it to be fairly easy?
If you want to sell your property quickly, for the most money, and with the least amount of trouble, read on to find answers and learn how to successfully navigate the experience. At Property Management Pros we use our professional expertise to benefit property owners in their daily dealings with their real estate management.
To help you decide whether to try to sell it yourself or hire someone to do it for you, here are some questions to consider. Take some time now to thoughtfully step through the selling process, evaluate potential problems, and identify how to avoid or correct them.
Is the property in good repair?
Before you list your property inspect it closely and make sure it is free of damage inside and out. This includes:
All electrical systems are updated, safe, and working properly.
All plumbing is in good repair. Replace any leaking or inefficient toilets with water-saving designs.
Heating and cooling systems work as efficiently as possible.
All appliances are clean work properly.
Flooring is clean and not worn, or replace as needed.
Walls are clean and not damaged, or repair and repaint as needed.
The roof is sound. Gutters drain correctly.
Windows and doors open, close, and lock.
The property is free of any type of infestation and trash.
Lawn and landscaping look appealing and well-maintained.
Do you know what your property is worth?
The value of your particular property is determined by a number of factors. You can’t just compare it to the others in the neighborhood and guess at a listing price. You may get a general idea of what you can ask, but to make the best profit possible you need to do a little more homework. An overpriced property may not sell quickly, and the longer it sits on the market the more undesirable it becomes. Listing too low (unless you just want a quick sale) means less money in your pocket at settlement.
Do you know your market?
Who are you looking to attract as the ultimate buyer of your property? A seasoned investor — or a first-timer? Younger — or older? An individual — or a corporation? Or even: Does it matter to your strategy? Establishing your target market helps direct your marketing efforts.
How will you advertise?
If you choose to sell the property yourself, another crucial aspect to consider is advertising. How effectively you get the word out about the sale will affect your bottom line. For many people this task alone is overwhelming and a big turn-off. Again, the effectiveness of the advertising campaign directly impacts your profit.
Are you up for wheeling and dealing?
Can you deal with offers and negotiate with skill? Do you know how to qualify a buyer? Do you know how to fill out the appropriate paperwork, involving the offer or counter-offers? Are you willing to answer the phone whenever it rings — or promptly return calls — until the property sells?
How will you handle the settlement process?
When you agree on the terms of the sale, do you know the next steps to take? What legal paperwork to complete and sign? Is the title free and clear? Where will settlement take place? Who will help you correctly file and finalize all legal papers to the satisfaction of all parties?
If you want help selling your property or would like to know more about how to run a profitable property management business, contact us today. At Property Management Pros we understand the role that the internet plays and can offer a completely web-based system to help you achieve your business goals.
One of the main benefits of home ownership is that you can often rent the property and make enough money to cover your mortgage and make additional income for yourself. If you have an additional home or someplace else to stay, this is a great way to make money. Many small and medium sized businesses have been started when home owners rent out their homes to generate additional income. Eventually, they can purchase more properties and continue to grow income. However, many people wonder when is the best time to put a home on the market.
Income to Price Ratio
One of the most important indicators used to determine the rental market is the income to price ratio of homes in the area. This is a little complicated but gives a good sense of whether buying a home is affordable to most people in the area. The ratio is determined by dividing the median home price by the median salary in an area. For example, if the median home price is $100,000 and the median salary is $50,000, the ratio 2x. Generally a healthy ratio is between 3x to 4x. At the peak of the housing boom in 2007, the ratio reached 7x. This was obviously way to high.
During these periods, people should not be buying new homes because they are unreasonably expensive. Instead it is better to rent for most people and wait until home prices become more affordable.
Home owners should examine the trends in their community. If the ratio is above 4x and has been rising steadily over time, it is a good time to rent out your property. More and more people will need to find an place to stay as they cannot afford to buy themselves. That means rents will rise, you will have greater profits and more demand.
Seasonality actually also makes an important impact on the price of rents. Certain times of the year have much higher demand for new housing than other times of the year depending on the area. However, a general rule is that rents begin rising in May and June, stay high in July and August and slowly begin going down after September. This occurs primarily based on the school schedule but also because people generally prefer to move during warm weather rather than in the cold.
Personal Profit Using Comps and Costs
Another way to decide to rent your home is by calculating your personal profit. The first thing to calculate this is to look at the rents for similar properties in your community. Make sure to find places that have a similar quality, number of bedrooms, number of bathrooms and access to schools, parks or retail locations. Once you have found several comparable properties (comps), average these rental prices together to get the expected amount that you can rent out the home for one month. For example, you may be able to get $1,000 per month in rent for your home.
Next, calculate the total amount that you pay in terms of mortgage and maintenance. For example, you may have mortgage payments of $600 per month. Additionally, you have to pay for landscaping, plumbing, any emergency fixes, insurance and professional property management. Those could total an average of $200 per month. You may leave the heating, cooling and electricity costs to the tenant.
Taking everything into consideration, you will profit $200 per month or $2,400 per year. These funds could be plowed back into the mortgage to pay off the home faster, into other investments or into improving your lifestyle.
On the other hand, you must consider the costs associated with your new living situation and whether it is worth the trade-off when taking into account the extra $2,400 in profit.
Property Management Pros is a leading site for finding the best property managers in the market. For more information, please contact us.