One of the realities of investing in Orange County single-family rental properties is that it might be hard to trace that next great bargain property. This applies especially when demand is high, and supply is limited. Such market conditions tend to drive property prices up, leading to what is known as a seller’s market.
But just because the market is highly competitive, that is not to say that you must cancel your plans to buy a rental property. However, this is an indication that you need to know a few tips to do so successfully. In this post, we will bring up more information on how to smartly navigate your way through buying an investment property in a seller’s market.
Overcoming the Challenges of a Seller’s Market
When more buyers are looking for properties than people are willing to sell, rental property investors may experience major problems. Listings commonly stay on the market for a short time frame, bidding wars are common, and properties usually sell for more than the asking price. It also can make sellers less willing to negotiate or offer any incentives given that their property has the potential to sell quickly. To surpass these challenges, here are some things you can do to get your hands on that next investment property:
- Focus on Neighborhoods. No two markets are totally alike, and the same is true of neighborhoods. In a seller’s market, look for neighborhoods with available properties that are likely to see continued increases in rental rates. An ideal location may be far more valuable than getting a bargain-basement deal on the property.
- Pursue Off-Market Properties. When listings are sold within a couple of days on the market, it’s suggested to utilize alternative strategies to keep your investing on track. Locating off-market properties is one of these strategies. These can be discovered by contacting local property management companies, other rental property owners, or real estate agents with local expertise. This is where having market experts like those at Real Property Management Impact can give you a competitive edge!
- Crunch the Numbers. Since residential properties will probably not sell below market value in a seller’s market, it is recommended to cautiously examine any property you wish to acquire. You should also accept the reality that you may end up paying asking prices (or above) and ensure that the margins still work out to your advantage before making an offer.
- Get Pre-Approved. In a competitive market environment, it is a good idea to move quickly once you do find a property you want. Having your financing equipped and ready to go can help give you an edge over other buyers, primarily if you have a pre-approval in hand and have previously interacted with a specific lender. By giving your seller higher confidence in your capability to complete the sale, they may be more eager to choose your offer above others.
Procuring an investment property in a seller’s market can be a challenge, but if you use these and other tips, you can quickly succeed. If you’re ready to get started and buy a rental property, Real Property Management Impact can help. Our Orange County property managers have the local market expertise and exclusive information on off-market properties to help you find a profitable investment property. To learn more, contact us online today!
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