The residential real estate market is said to reach $127.4 trillion by the year 2029, as it’s seeing a surge in demand due to fluctuations in interest rates. This is the perfect time for real estate investors to take advantage of the market through traditional sales and auctions.
Real estate auctions can provide investors with some amazing properties that can be transformed into high performing rental properties. However, if you’re a first time real estate investor, there’s some things you should know before you buy at auction so you can make a long term profit on the property. In this article, we’ll talk about how you can turn an auctioned property into a high performing rental so you can expand your portfolio and make a great return on your investment.
- Do Your Research Before Auction Day
When buying a property at auction from places like Alex Cooper Real Estate Auctions or other similar businesses in your local area, it’s important to do your research beforehand. Some things to think about before you buy include:
●Research the history of the property as best you can to understand if there’s any code violations, unpaid taxes, liens or other legal implications that will affect you when the deed is transferred to you.
●Where possible inspect the property prior to buying as most auctioned homes are sold in “as-is” condition. This means that if the house has broken walls, mold everywhere, broken windows, or structural roof damage, that’s what you’ll be buying at auction.
●Understand the neighborhood better and the surrounding businesses. Successful investments are those where you can rent the home out quickly because renters know the location is safe for their family. Check the average rental prices in the area, if the property is close to schools or businesses, if there’s public transport close by or if the neighborhood is quiet. All these factors will help you decide if the property is a good buy.
●If you were able to inspect the property prior to auction, work out how much it would cost to repair it and work out if it’ll cost you more to get it up to code and in compliance with safety regulations in regards to tenant/landlord laws.
By doing your research first you have the ability to buy an auctioned property which can give you maximum returns.
- Strategic Renovations For Maximum ROI
After buying your dream property at auction, it’s important to consider what renovations would make the biggest ROI, depending of course on the condition of the property you purchased. Some strategic renovations are:
●Kitchen renovations can provide some of the biggest ROI. Some things you could do are upgrade the lighting fixtures, paint the cabinets and walls, remove the old kitchen and add a new one, or change the countertop to a fresh one. Adding a dishwasher if it doesn’t already have one is also a great option.
●Bathroom renovations are the second best way to bring better ROI. Some things you can do are remove all old tiles and add a newer more modern tile, update the bath or shower depending on its age, replace the toilet if it’s dirty and stained, add new tap fixtures.
●Throughout the rest of the house it’s a good idea to paint the walls with a fresh coat, update all light fixtures, clean the windows and trims, as well as update appliances. You can also add new flooring options or sand exposed wooden floors and recoat them.
●Enhance your outdoor appearance with a fresh coat of paint, new exterior light fixtures, and create an inviting garden landscape leading up to the house. This can attract tenants to want to rent your property.
These upgrades can really make your auction property a high performing rental long term. So it’s worth spending the extra money.
- Market Your Property in a Strategic Way
When the house is ready it’s important to market your rental property the right way in order to gain interest. Some things you can consider when doing this includes:
●Understand what type of tenant you want to market to. For example if your rental is close to schools it could be better to target families with children.
●Consider your price and the rentals surrounding you. If you outprice yourself you won’t get interested tenants. With cashflow limited to some people, you want to make sure you’re either at the middle or mid-way to the top of the rental price market for the area your property is in. This keeps you competitive.
●Consider online marketing platforms like Airbnb or even through real estate agent sites. Make sure you take professional photos of your property along with providing a detailed description on what the property has to offer and any key highlights it has. This will help bring more interest to your property.
Marketing your property is all about targeting your audience and making sure you check the boxes to fit what they’re looking for in terms of price and what you have to offer. Make sure you do some research before you market it.
Endnote
Turning auctioned properties into high-performing rentals can be a rewarding venture for property managers and investors, but it requires careful planning, professional inspection, strategic upgrades, and proper marketing. By conducting thorough research, budgeting for essential improvements, and understanding your target rental market, you can transform an auctioned property into a profitable asset. With the right approach, even properties acquired at a bargain can become valuable, income-generating investments.
