ROBERT CROWE
RE/MAX Real Estate Services
410 - 650 West 41st Avenue
North Office Tower
Vancouver BC, V5Z 2M9
Canada
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Featured
Factoid:
Mortgage analysts at Barclays Capital in New York predict the supply of foreclosed homes to rise. The highest number of foreclosures are concentrated in Florida, Arizona, Nevada, California and Michigan.
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About Robert Crowe
Robert Crowe specializes in helping owners of distant city condominiums make informed investment
decisions.
Robert lives in Vancouver, British Columbia. He is an avid real estate investor and a licensed Realtor with Re/Max Real Estate Services.
Learn more about Robert here.
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March 2010 Vol. 2 No. 3
Welcome!
Today's newsletter offers three tips to get the highest value!
Please send me your questions and comments (I respond to every one).
Regards,
Robert Crowe
Vancouver Real Estate Specialist
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3 Must-Do Tips for Selling that Investment Condo
Not long ago I did a TV segment for Homes and Gardens Television that featured one of my own condos. It's one of those small spaces, easily filled with the tenants' large-scale furniture. Take a look at the video clip, and you'll see what I mean. The film crew got a big laugh out of the tenants' two pug dogs who became the stars of the show.
The experience made me think about condos, condo furniture, and how to make the one work for the other when you're ready to sell. So let's talk about condo selling today - how to make your most impressive presentation, sell fast, and get out with the best price.
Determining the right time to sell is easy if you have a pre-planned exit strategy set to trigger the sale. This strategy might be: "Sell when prices rise to where only speculators and homeowners are buying" or "Sell when smart long-term investors are 'leaving the building.'"
A pre-planned exit strategy prevents selling on whim, or holding onto a property too long while you waffle over whether the time is right. Fortunes have been lost by mistakes in either direction! Knowing in advance what will trigger your sale, and acting promptly when that time comes, keeps emotion out of the decision. This is smart strategizing for any investment, whether we're talking stock market or real estate.
Keep these three tips in mind to maximize your profits:
1.) Sell slightly below the peak of the market
Judging when the peak has arrived can be challenging, and most condo investors wait just a bit too long and find themselves selling into a falling market. You never want to be the last one to leave the party - the last one usually winds up feeling the sickest the next day!
Look at what the cash flow is, based on current prices relative to rents. I get the itch to take my money and run when prices go up beyond where I can pocket much from a monthly rental on a property mortgaged at 80 percent. After all, why should I pay someone else for living in my condo? I work hard for my money, and I know you do, too. When it's time to sell, your pre-arranged trigger will keep you from getting fooled into missing the market's peak.
2.) Get the tenant to co-operate
Chances are your tenant won't be overjoyed to hear you've decided to sell and that the condo must now be made available for showing. Giving a bit of incentive to cooperate makes good sense and will pay off in the end. There are a number of ways to motivate your tenant. My favorite is to offer a rebate of a portion of the monthly rent if they keep the place clean, tidy, and make it easy to show.
The other way to provide a win/win is to offer a cleaning service to keep the suite in top shape when viewings happen. Tenants get a nice perk for giving their home up for a couple of hours on the weekend, and you get a great-looking space for potential buyers to see.
Most people underestimate the importance of how their investment condo "shows." Anyone is more likely to buy when they can imagine what living in a certain space would look like, and a condo filled with furniture helps the imagination. By contrast, clothing strewn on the floor and dust on the coffee table give the imagination a negative impetus.
The same thing goes if you're trying to attract tenants. Many times I've opted for renting my condos furnished and providing a cleaning service included in the rent. I've found I can get a higher rent when the property looks staged with properly scaled furnishings and tasteful accessories. And higher rents, of course, mean a higher sale price in the future.
3.) Have all your documentation ready
Selling an investment condo should be like selling a business. Supply a list of assets. These might include some furnishings, but also could include a good long-term lease that has value. When I'm in buyer mode, I want to see what the cash flow is for a property. I look for a financial statement from the past couple of years showing what the net profit has been.
Copies of insurance policies, utility bills, condo association charges, and so forth (when organized properly) can present a strong argument that you have run the condo like a business and that the investment makes sense. Investment buyers want to know everything about the property, particularly if they live in a distant city. Make them feel comfortable making an offer by presenting well-organized association minutes and financial statements.
I always have a local attorney go over documentation so that I don't get surprised by local rules and regulations that could turn out to make my investment unprofitable. Assume any buyer will do the same.
If you follow these guidelines and price your property realistically, you should have no problem getting a buyer to pay a fair price. Soon you'll be joining me out on the road looking for the next great opportunity in another distant city where you can invest your profits!
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