Bay Area Investors Cash In On Great Deals With Quality Sacramento Properties
By John Tiner, CEO Tiner Properties, Inc.
The Sacramento residential rental market is enjoying a convincing upturn in rent values! This may be the best investment opportunity for owning property that Sacramento has ever seen. What do investors want from their agent, their investment, and their property manager?
Investors want to keep their hard earned dollars safe.
The investors we talk with are concerned with getting the most accurate information about a property before they buy. Factors such as location, cash flow, projected equity increase, maintenance costs and occupancy rates are crucial. Understandably, they want to avoid nightmares such as damage, high-dollar maintenance and repairs, and a revolving-door tenant base. Safety of their investment is near the top of the list.
Discriminating investors also want convenience. Can they get quality information about an investment property and also know the prospective tenants are being investigated thoroughly? After all, they are entrusting their investment dollars to a property manager to keep that property in good condition. Repairs from bad tenants can easily consume equity in a property. We have all heard about these nightmares!
Many investors in Sacramento area properties live in the Bay Area or Southern California, and may not have the ability to know which neighborhoods are more likely to have long-term renters who take care of their properties. Investors often rely on the internet or newspaper to locate available properties. This can be a minefield with the potential for significant loss. Many properties appear to be a great deal, but in fact are often in sub-standard neighborhoods, with a high tenant attrition rate and corresponding costly repairs.
As with all markets, there are some areas that offer investors solid rent returns while not being in a problematic neighborhood. A knowledgeable agent can find a property in your budget that gives you a long-term return on your investment through competitive market prices, long-term tenant occupancies, and a screening process that finds only those tenants you will love to keep.
How competitive is the sales market for investment homes?
Very competitive. That said, there are strategies you can use to ensure that you will succeed in procuring the property you want. In the past six months, I have written over 200 good, solid offers, many for cash and at or above full price. Even in the best of circumstances, only around 1 in 10 is being accepted in this competitive sales market. Many new investment-grade listings are receiving 30-50 offers in the first few days on the market.
So, what can you do to maximize your potential for success? Work with an agent who understands the art and intricacies of the property investment market and possesses:
- Vast understanding and experience in rent and sales values – so you can confidently know your offer is competitive without being overgenerous.
- Sophisticated knowledge of what to ask sellers to pay – and what will kill the deal.
- How cash buyers can provide ‘proof of funds’ to alleviate the sellers concerns about the buyers ability to close escrow – on time and hassle-free.
- What constitutes an iron clad ‘pre-approval’ lender letter for a buyer using financing and puts you in a strong position to compete with cash buyers.
- Superb communication to the Listing Agent to solidify and clearly illustrate the strength and commitment of your offer.
- Ability to navigate the murky waters in the short sale approval process to get a ‘yes’ from the seller’s bank and move through the process expediently and easily to closing – with few or no ‘surprises’ from the bank.
- Coordinate the timing for ordering appraisal, pest inspection, home inspection, etc. so your money and time are not wasted, and none of these items hold up close of escrow.
- After close of escrow, quickly make the transition from buyers’ agent to property manager so your property will be made rent ready, marketed effectively, and get a qualified tenant moved in as soon as possible.
An experienced, qualified buyer’s agent who is also a stellar property manager is worth his/her weight in gold. The value you will receive is exponentially greater, continuity is seamless and accountability rests with one person. After all, you are investing because you want a return on your money, NOT because you want more work.
Things you should consider before investing in Sacramento residential real estate:
- Get accurate numbers before you buy.
- Are the properties in the area well-maintained, with nice curb appeal?
- Has the property been maintained, or will it be economically feasible to bring it up to standard?
- Does your agent also handle property management, including leasing?
- What process do they use for tenant applicant investigations?
- How long has your agent/property manager lived and worked in the area?
- What is the realistic cash flow that can be expected from a given property?
- What do the long-term investment return projections look like?
- Will the property manager conduct routine inspections and keep you regularly informed?
Investing in the Sacramento residential market adds up to value and trust
As an investor looking for residential real estate, the Sacramento market is an excellent place for your dollars. Mortgage interest rates are at an historic low, responsible available tenants are at an all-time high. Properties priced under $200,000 appear to have hit their low and are beginning their ascent. Foreclosures and short sales dominate the total sales market. Rents are rising faster than inflation, giving you protection against the declining value of our dollar.
Most importantly, working with an agent and property management company you can trust is key to the successful investment of your time and money. Knowledge, ethics, research and management skills coalesce to make an ideal partner for you.
John Tiner is CEO of Tiner Properties, Inc. A family owned business since 1976; they have a long track record of helping investors purchase and manage the right Sacramento properties for their real property portfolio.
John helps investors look at the value of homes from a long-term perspective and factors in occupancy, return on equity, maintenance costs, growth in the neighborhood and cash flow to determine if the property is right for you.
Our company's values:
- To treat each client’s time with importance
- To treat their investment as if it were our own
- To honor and maintain client trust
- To earn and keep your loyalty
Are YOU ready to take advantage of an exciting and profitable opportunity in the Sacramento residential real estate market? Call John today 916-402-3095.
Posted on Tue, September 18, 2012