3 Approaches to Finding an Area’s Vacancy Rate

Vacancy Rate

In the real estate market, many indicators and trends are of potential interest to investors, property owners, and building managers. The vacancy rate for an area is a common figure to watch. Learn what information an area’s vacancy rate can reveal and how you can find an area’s vacancy rate.

What Is a Vacancy Rate?

The vacancy rate for an area simply calculates how many properties are available for rent compared to the total number of rental properties in the area. In other words, what percentage of rental units are not occupied?

Vacancy rates are calculated for residential rental markets as well as commercial markets, which include retail, office, and industrial spaces. An area’s vacancy rate can vary significantly between different parts of a city.

Why You Want to Know the Vacancy Rate

Generally, you analyze vacancy rates to assess the market rental conditions in a particular area.

The federal government and economic forecasters use the rental vacancy rate, as one component in the index of leading economic indicators, to evaluate the current economic climate. Property owners and investors use an area’s vacancy rate for additional purposes:

  • An area’s vacancy rate can be used as a benchmark. For example, if you own a multifamily rental development that experiences an increase in turnover, then knowing the surrounding area’s vacancy rate could be useful in comparison. If the neighborhood’s vacancy rate has not changed significantly, then your own building’s higher vacancy rate indicates a likely issue with the property management, property condition, or tenants.
  • When seeking out commercial space, you can use vacancy rates to identify locations with abundant available space at lower costs per square foot.
  • If you invest in rental properties, the average vacancy of both the building and the area is among the most important factors to consider. A high vacancy rate indicates less revenue, as the property will have fewer tenants occupying fewer units. High vacancy rates also indicate the area is less appealing to renters.

Sources of Vacancy Data

1. Census Bureau

The Housing Vacancies and Homeownership data compiled by the U.S. Census Bureau provides current information on rental and homeowner vacancy rates for the United States, regions, states, and for the 75 largest Metropolitan Statistical Areas (MSAs). Data is published quarterly and annually. Estimates of the total housing inventory and percent distributions of vacant for-rent and for-sale-only units are available for the United States and regions.

These large datasets are best used for obtaining residential rental vacancy rates for large regions or one of the largest MSAs. Individual neighborhood rates cannot be calculated with this data.

2. HUD-USPS Vacancy Rate Data

The U.S. Department of Housing and Urban Development (HUD) receives data from the United States Postal Service (USPS) every quarter. The USPS provides aggregate counts of residential and business addresses that are collected by postal workers and identified as being vacant (i.e., not collecting mail) for at least 90 days.

Per agreement with USPS, HUD can make the data accessible only to governmental entities and non-profit organizations.

3. Industry Reports

Several real estate industry associations and regional organizations or agencies regularly gather occupancy data. Some publish regular reports with detailed analysis of specific markets. A few examples are below:

  • The National Association of Realtors releases quarterly Commercial Real Estate Market Trends and Outlook reports.
  • Colliers International publishes several reports, such as the quarterly U.S. Office Market Outlook Report.
  • Local chambers of commerce, local real estate professionals’ organizations, regional planning associations, transit agencies, and city governments routinely track area vacancy rates.

In addition to the formal industry data, informal information can be collected from an area’s property owners and managers by simply asking.


What to Look for In Your Point of Interest Location

Point of Interest Location

While several factors determine a home’s value, none has as much impact as location. Location determines access to amenities, tenants’ availability, among other needs.

Here are some of the factors to consider when looking for an ideal location for your real estate investments:

1.     The Commute Time

Before you settle on a property, determine how much time you will spend on the road. Consider if you are okay with more extended periods on traffic to and from work. While most people prefer a great home, even if it comes with a long commute time, over time, it becomes hectic. An ideal location is close to public transport systems with developed commuter rails and major highways.

The primary concern with commute time is striking a balance with property prices. Most homes located within the suburbs, while they come with less commute time, are incredibly costly. To help you settle at the appropriate commute time, consider the commuting costs. Opt for longer commute hours if you have a flexible job that allows setting your working hours or telecommuting.

2.     Lifestyle

Everyone has certain qualities that make their ideal location. Whether you are looking for a slow, calm life, or a place full of amenities, you can find somewhere perfect. Before settling on a property, take time to review all the essential amenities you need.  

Use sites like Walkscore to determine the areas’ walkability and access to places of interest. Also, visit the place in person to see if it embodies what you need in a position of residence.

3.     Development

Upcoming constructions in an area is an indication of a great place to stay. Planned developments like hospitals, schools, and public infrastructure are likely to improve the property’s value.

Look out for the area’s private property developments as well. An influx in new home constructions is a sign of a good neighborhood. It shows increased buyer demands, which is great for investments.

4.     Neighborhood

The neighborhood you are moving into is almost more important than the house itself. The community determines how you raise your kids and the general wellbeing. While you can renovate or repair a damaged home, there is so little you can do about a bad neighborhood. Take time before committing to a property to determine if it is the right neighborhood.

Do your due diligence and don’t rely only on what the realtor tells you about the community. One of the indications of a great neighborhood is when they belong to a homeowners association (HOA). The HOA provides guidelines and regulations for the residents. Also, speak to the residents on their opinion of the place.

The general appearance of the neighborhood shows how great it is. Look for how much the current residents are investing in the place. A lot of investments in businesses like restaurants, shops, and grocery stores are indicative of a developing area. Such sites have high prospects of a rise in the value of the property.

Lastly, look for the state of the homes in the area. Well maintained homes with excellent landscaping are signs of caring neighbors.

5.     Lot Location

The other factor to consider is the actual location of the house. Before you agree to take on a property, confirm how accessible it is by road. Look for the presence of any restrictions on the business or constructions you can set up in the future. Inspect the area for environmental hazards like nearby manufacturing plants.

Even though purchasing a property at a wrong location can be easy, selling it, later on, will be a challenge. An ideal location has a great view, is free of noise, and can accommodate a high-end lifestyle.

6.     Safety & Crime Rates

There is no amount of investment that is worthy of in a crime hotspot. Other than the lack of peace of mind, you will struggle to find tenants for your property. Research to ensure the new home is in a safe area.

There are several online resources to use to determine the safety of your area. SpotCrime and CrimeReports are the leading sites with police and crime information in any area. The other sites are NeighborhooScout.com and Safewise.com. Apart from the online resources, move to the place in person to verify the information you already have. Walk around the neighborhood at any time to have a feel of the area both in the day and night. Look for indications like local businesses, children playing, and community events to determine safety. 

Talking to the local community also helps determine the safety and to collect insights on the lifestyle of the area.

7.     Local Amenities

The availability of local amenities is a must when looking for an ideal location. The place should be accessible to amenities like family attractions, shopping, and restaurants. The only concern that comes with property near amenities is the cost. You may have to pay a premium to land these properties. Even though this should not be an issue as the demand is assured.

You also need to look for the public transport system, street lighting, and water supply. Several sites like Trulia and Zillow comes in handy when comparing the distance between the property and the essential amenities. 

8.     Schools

Schools are indications of great places to stay, even if you don’t have kids. Having excellent schools helps in ensuring the home’s value. Like safety and crime, you cannot depend on online resources fully to determine the state of schools. Start by collecting information from sites like GreatSchools.org for data on the different schools. After this, you visit the school in person to establish infrastructure and the general states of the schools.

Bottom Line

Market analysis is vital at every stage of investment. Using this guide, you can quickly determine the best market to invest in. It can also come in handy in evaluating the location to confirm if it’s the right choice.

Are you looking for more ways on how to land the best location for your real estate investment? Prospect Now is the place to visit for all you need to know about the right location. Contacts us today to get started.

What to Look for in a Single Family Home

Single Family Home

It takes a lot before you can take the big step to invest in a house, especially a single-family home. Even after you have your finances in order, you will find yourself hesitating because you don’t want to make a wrong move. Nobody likes to get fleeced or being stuck with a depreciating property.

However, it would help if you did not let fear keep you from what could very well be the deal of a lifetime. There are several firm indicators you should consider to make sure you invest in the perfect single-family home. These indicators are:


Pricing is one of the indicators of a home’s value. The first step towards purchasing a single-family home is to line your finances. The amount of money you are willing to spend determines the home you can purchase.

Most investors opt to buy single-family homes due to their relatively low purchase and maintenance costs. This makes it a valuable investment, even for beginner investors. Getting a loan for financing the purchase is also easier for a single-family home compared to other types of property.


There is nothing quite as important as location when it comes to a single-family home. Investing in a house located on a conducive location ensures returns on assured tenants and high rent prices.

Given that single-family units attract families, go for a location with amenities for the family needs. An excellent site is child-friendly with schools, easy access to health facilities, and shopping. The area must also be free of crimes.

Also, consider the area’s living standards. Look for a place with relatively lower property tax, investment property insurance, and favorable property legislations. If you are planning to rent out the investment in Airbnb, go to Airbnb accessible places with fewer fees.

Another important factor to consider is the location of the property relative to the rest of the area. That means you need to consider whether the property is detached or whether it shares a fence with neighbors. In the same way, corner lots tend to be larger, more expensive, and command higher rents.

Also, remember to consider the area’s expected growth. A single-family unit is excellent in an area with an increasing number of new families.

Rate of Returns

While it might be challenging to determine precisely how an investment will pan out, the right location and pricing almost assure it.


Like any other business venture, profit is necessary when investing in a single-family home. A successful investment generates a positive cash flow; more income compared to expenses.

Most family homes are profitable. Unlike other properties where the landlord covers utility bills, most tenants in single-family homes are responsible for utility payments. Also, the family homes incur lower insurance rates and property taxes as they are considered one dwelling unit. The few expenses in these investments ensure positive cash flow. 


Once you have finalized the transfer, the job has just begun. While single-family homes are generally expected to appreciate over time, a lot of effort is involved in helping maintain such a rate. Maintenance is key, as well as making sure that you have the right tenants in your home.

For that, you need experienced professionals who will keep an expert watch over your property. With the in-depth knowledge of the industry, real estate, and tenancy laws, and connections with all the right people, you can be sure that your property lies in the right hands.

Managing a rental single-family home starts with vetting potential tenants. This process can be challenging when you lack the right knowledge and experience. You do not want to end up in a long-winded court battle with a troublesome client or end up having to pay a fortune in maintenance costs.

You also need to make sure that your property manager will act with integrity. They will need to collect your rent on time and deposit it as agreed. Besides, the best property agents will give you regular reports on the state of your investment.

You will need to find the most reliable property management company in your area so that you can have peace of mind regarding your property. 

Physical Features

The appearance and other amenities are what attract the tenants. Most people use amenities like the number of bathrooms, bedrooms, and parking slots to determine their ideal residence.

With only one family occupying a single-family home, the tenants get enough privacy. The tenant does not have to worry about other annoying neighbors or shared facilities that are susceptible to breakage. The units also come with spacious backyards for the kids to play and enough parking spaces.

Invest in a single-family home that has enough facilities. The more facilities it has, the higher the likelihood of tenants. You also get to charge higher rates.


When buying a single-family home, you want to pay as small a price for it as possible without affecting its long-term value. You will find that houses which require a bit of maintenance will be far cheaper than those which are in stellar condition. Some homeowners are too lazy to get bothered by a simple paint job, carpeting, gutters, lawn, or simple repairs.

If you’re a hand man with the tools or know of one, you can overlook such issues in a potential property and snag it for a price far below market value. You can then spruce it up for next to nothing and get to charge much more for it.

However, if you’re going to do this, you need to be very careful about what can and can’t be solved by a few strokes of the paintbrush or a hammer and nails. Most homes are sold cheaply for a reason, and no one will be forthcoming with that information. Keep away from bad foundations and walls, leaky roofs, bad utility installations, and pest infestations.


Investing in a single-family home can be very lucrative, with an average return rate of about 9% annually. However, it can also turn into a massive loss if you do not know your way around the business. This is why you need to have professionals guiding you all through from purchasing your property to managing it.

Are you looking for expertise to reduce your cost and ensure you achieve your profits? Prospect Now is the real estate management you need to look for. Contact us now for our competitive prices and guaranteed outcome.


Why Understanding the Crime Rates in Your Neighborhood is A Must

neighborhood crime rates

Home is where the heart is, which is why the safety of your neighborhood should remain a priority. This rule also applies to traders and agents within the real estate market. Sometimes a property seems absurdly affordable for its size or location. When a deal seems too good to be true, it is best to seek a second opinion – crime may be an underlying cause.

Determines Security Measures

The safety of your neighborhood will affect the amount of money you’re going to spend on your home security set-up. Be prepared to fork out extra fees for higher fences, to sturdier gates and even locks with biometrics.

Although pricey, it is essential to safeguard the boundaries of properties situated in neighborhoods with a high crime rate. Consider this a mandatory insurance fee for your property and the safety of occupants. 

Be wary though, an overly fortified home might defeat the purpose. If your property looks like Fort Knox, chances are, you’ll be attracting the curiosity and attention of the unwanted company.

Safety of Children

Although school transportation can be easily arranged through chartered bus or carpooling services, you can never be sure of sidewalks and driveways when your child is unsupervised. Additionally, an unsafe neighborhood may be problematic for the developmental years of young children – constant exposure to crime and law enforcement may lead to bad influences and lifelong trauma. 

Hospitality & General Environment

Expect more inviting pool parties, Christmas gatherings, birthday celebrations, and New Year countdowns when you’re situated in a safer neighborhood. Guests and residents will have greater peace of mind when they park their vehicles at your property or decide to leave during the darkest hours of the night.

Additionally, some taxi drivers and carpooling agents may choose to avoid high crime areas during certain times of the day. This can become quite an inconvenience if you do not own personal transportation. 

Rental Woes

The location of your property will also determine the quality of your tenants. Property owners may have a hard time searching for suitable tenants if their neighborhood has a high notoriety index. As a result, owners may be forced to reduce rental fees way below average market rates, which attracts undesirable tenants such as illegal immigrants, thugs, dealers, or the occasional broke foreign student who defaults on payments. 

Be extremely cautious when checking through the documents and background of potential tenants. Avoid rushing through an official agreement with the wrong crowd while you’re desperately trying to rent your place out. 

Challenges in the Resale Market

A dangerous neighborhood will significantly reduce the resale value of your property regardless of how well-furnished and renovated it may be. Because let’s face it, few people are willing to risk living in a dangerous place no matter the size of the discount.

This may result in a lack of interested buyers for an extensive period of time, which can lead to gradual losses in your property value as you’re forced to spend money on property maintenance and even reparation fees for an indefinite period. 

Lay of the Land

It is important to be fully aware of the safety of a neighborhood before committing to a purchase. Here are some ways to achieve this:

1) Speaking to potential neighbors – and/or surveying the condition of surrounding structures (do they look abandoned, are the windows suspiciously tinted, are there suggestions of illegal activity? You’ll be able to gather a great deal of info from conversations with nearby residents – are they friendly, shifty, inviting? This will give you a gauge of what to expect as a future occupant.

2) Consulting online sources – A quick search on the web should be able to provide you with records of the latest crimes and activities in your neighborhood. However, this might prove risky and inconclusive since most petty crimes go unreported by the media. Still, this can give you a glimpse of your neighborhood’s security standards.

3) Seeking professional advice –This means speaking to your real-estate agent and sieving through every bit of detail. If you have questions or a nagging suspicion, feel free to raise them. Any respectable agent should be able to provide you with a clear and straightforward answer regarding the safety of a neighborhood. This, however, is strongly based on a mutual policy of trust and transparency.

4) Relying on detailed data – Specialized sites like ProspectNow provide a comprehensive database of residential and commercial properties. By tapping on the extensive directory and services provided by the company, users can gain exclusive access to document-supported information in making informed property purchases.

ProspectNow is the complete property and owner database that will assist you with closing quality deals with the most reliable information.

What’s the Future of Real Estate

Future of Real Estate

People worldwide have stakes in real estate, as property owners, consumers, or managers. You, therefore, have to understand the trends and the future of real estate for a competitive edge.

Real estate, just like any other industry, keeps on changing. Emerging technologies and shifting home buyer demographics impacts the development of the industry. Other changes are also attributed to political and economic discrepancies.

Here are some of the trends that will inform the future of real estate:


Competition in the current real estate set up is at its stiffest. New investors are using technology and tiered pricing models to edge out the traditional real estate industry players. According to the Urban Land Institute and PwC, competition in real estate is an upward trend. To stay on top of things, you must embrace creative ways of finding new markets. You also have to consider cutting costs and reducing overheads for competitive rates.

The other viable option is to specialize in a specific niche. Specialization and focus on niche-level opportunities allow you to offer the best quality for the target market. Some of the areas to specialize are senior housing, co-living, data centers, offices, and hotels.

The ULI report recommends specialization; and that you learn how to provide great value in your area of choice. It reads, “Specialization has become the hallmark of many professional sectors. Real estate is no exception.”

Real Estate Outsourcing

Most real estate investors are outsourcing specialized, non-core functions to outside vendors. Outsourcing helps in reducing costs and other broader strategic outcomes. It speeds up decision making, productivity, and customer satisfaction. Also, it improves data capturing, reporting service requests, occupancy, and energy consumption.

Reports by JLL show that investors are partnering with managers for better business intelligence. Facility managers, on the other hand, use sophisticated technology and analytics to bolster productivity. Technology generally improves profitability, and elevate the employee experience.

Outsourcing reduces overhead costs. An external partner handles day to day operations, while you remain with a lean internal team. This allows you to work with a small, productive and manageable team.

As much as outsourcing seems like the in thing, it requires vigilance. Before outsourcing, ensure the external partner can provide world-class expertise. Check for intensive risk management, standards, and compliance. The deal is then built on trust, which strengthens over time as the partnership develops.

The Rise and Rise of Real Estate Technology

Every industry player in real estate has pain points that need solutions. Homeowners are looking for faster sales while incurring lower transaction costs. Brokers need more data, improved corporations in their network, and productive transactions. Tenants need affordability and faster leasing and payment processing. Investors need assurance of demand and supply data for better investment decisions.

All these pain points have prospects of solutions through technological advancements. The better the solutions, the more productivity, and workflow.

However, real estate is one of the slowest sectors to adopt new technologies. This should not be the case, given its size in investments and usage. The industry involves a lot of paperwork, calculations, and large transactions. These aspects can use top technologies for efficiency and accuracy. 

So far, the industry has adopted tools like Lotus and Excel. These tools have improved the quantitative approach to portfolio management and investment. The success of such tools calls for more solutions for other functionalities like accounting, analytics, and underwriting.

The increase in internet speeds and access has also played a role in the expansion of real estate. The Internet has made online transactions an integral part of the consumers. They are increasingly relying on the internet as a valuable source of information. Online platforms like Trulia and Zillow are top data and information companies. This has made them industry giants.

Advancements in data processing have created even larger specialized real estate companies. WeWork and Airbnb are some of the industry leaders in the upsurge of the sharing economy.

Venture funding also has a role in the real estate technological advancements. Having grown over the last decade from $20 million in 2008 to $4 billion in 2018, indications are that it will be on an upward trajectory.

Big Data and Machine Learning

Big data, AI, and machine learning are crucial in real estate for efficiency and productivity. Machine learning translates data to develop consumer applications and eCommerce facilities. This helps with the quicker matching of buyers with the property. The predictive technology in machine learning helps in the maintenance and upkeep of the property.

Compared to traditional methods, machine learning makes it easier to collect data. You can install automation systems like sensors in strategic areas in the building to collect data. The system then uses the data on security, energy, and elevator system to improve efficiency. Companies like PointGrabTellMePlus, and BuildingIQ are already achieving traction in building automation technology.

The other application of big data and machine learning in real estate is property management. Property managers use performance data to review agents’ prospect conversion. While using chatbots and applications to streamline the initial sales process. These systems collect information on consumer preferences and coordinates site visits.

Big data and machine learning also impact property listings. Online companies like Airbnb and Zillow use data to match consumers with the most relevant property. For more sales success, property owners and managers must understand these platform’s operations to create converting listings.

Over time, sustained technological improvements will make machine learning and AI more accessible.

A Greener Future for Real Estate 

From construction to design, real estate requires more sustainable practices. Urban Land Institute shows the commercial real estate industry is incorporating wastage-limiting mechanisms. These mechanisms seek to reduce water use, poor waste disposal, and carbon emissions.

The World Green Building Center states a third of carbon emanates from buildings. Proper waste management and reducing carbon emissions will help in protecting the environment. Greenprint Center for Building Performance projects a 50% reduction of emissions by 2030. Installing high-efficiency equipment and controls are some of the ways of reducing emissions. Others being, waste reduction projects, installing high-efficiency lighting equipment and reducing water use.

According to the National Association of Homebuilders, younger buyers are responsible for the need of sustainability features. The consumers are willing to spend more on purchasing a property. As long as it comes with longer-lasting and sustainable features. This implies that you need to use more energy-efficient appliances and systems in your property. With sustainable features, you can attract the right environmental-conscious buyers.

The Rise of Construction Costs

A report by PwC on Emerging trends in real estate finds an increase in construction costs as an expected challenge. Using the law of demand and supply, the demand for housing will go up, leading to a reduction in supply and labor. Coupled with the slow growth of labor productivity in the construction sector, you end up with a shortage. To ensure profits, property owners will have to increase the rents and buying prices.

Also, as mentioned earlier, green technology is a factor that increases costs. Most of the sustainable and energy-efficient solutions are expensive to buy and install. It is not a concern, though, as the consumers are willing to spend more for efficiency.

The Change in Customer Expectations

The need for better customer experience is at an all-time high. Data shows that consumers are willing to pay 16% more for top services. The best services feature speed and efficiency, convenience, and knowledgeable employees.

Real estate being an industry based on relationships, you have to ensure customer satisfaction. This is the best to master customer retention and to build your reputation. The sustained entrants of the new industry players are also another reason to provide superior customer experience. Providing the best customer experience is the ultimate way to beat your competitors.

To meet customer expectations, you need to involve customer intelligence and service aptitude. Instead of trying to solve customer needs, expect them, even when they are not already aware.

Most real estate players are adopting automation and AI to streamline processes and transactions. The solutions reduce response time, update websites, and personalize the customer experience.

Also, you must measure customer satisfaction levels. Use tools like the Net Promoter Score to determine customer opinion. To gauge the service level, you should confirm the likelihood of your customers recommending your business to other people.

Bottom Line 

New technologies, changing homeowner demographics, and relationships are the real estate future drivers. Technology is improving customer access and availing more opportunities. With the right technology, you will have the best solutions for assured customer expectations.

Are you looking for the most effective way to leverage technology in your real estate strategy? As the only platform with an accurate machine learning algorithm for predicting the velocity of commercial and residential real estate sales, Prospect Now is your best shot.

Contact us today for the best real estate sales solutions. 

How to Value Commercial Property Value

Commercial Property Value

Commercial real estate is a numbers game. As a buyer, it’s important to know how to value a commercial property’s investment worth. Many complexities come into play and some formulas do not account for the little details. Take the time to calculate every aspect you can cover if you want to spot no-brainer deals. 

Two of the most popular measurements of investment value for commercial real estate are the “Cap Rate” and Net Rental Yield”. We will break these down in great detail and then give other examples of value formulas to use.

Cap Rate of a Commercial Property

A commercial property’s “cap rate” is the “capitalization rate”. This figure is calculated by determining the ratio of NOI to property asset value. 

NOI stands for Net Operating Income. 

The “asset value” is essentially the sale price. 

How to Calculate Net Operating Income (NOI)

You are calculating the amount of operating income after all expenses. You do this to figure out how much cash flow the property will generate. 

You must factor both operating costs and vacancy losses. 

Some examples of operating expenses include property taxes, rental property insurance, maintenance and repairs, property management fees, and miscellaneous spending. You can look at what the current owner is paying for these expenses. You can also look at market averages. For example, 1% of property value is the typical amount that an investor will spend on maintenance expenses. 

Some examples of income include rent or lease payments, billboard fees, and vending machines or laundry service profits. Value these extra income sources at net value before factoring them into the NOI calculation.

As for vacancy losses, you can look at the actual figures or factor the standard rate in the property’s market. Some buildings have unique circumstances. In certain cases, fixing a few things could reduce your vacancy rate significantly. If the vacancy is already low, go with the current statistic for the building when calculating vacancy loss. Multiply the number of months any units are vacant by the rent value of them to determine the total loss. Add this to the expense side and subtract it from the income.

The NOI valuation formula does not factor in principal loan payments, interest premiums, depreciation, amortization, or capital expenditures. These factors will vary depending on the borrower. The point of the NOI formula is to value the property itself.

When to use the NOI calculation method…

As an investor, the NOI should be calculated prior to make an offer on a property. This formula can also be used after obtaining ownership. NOI stats help to determine cash flow and the value of the income and expenses can always change. By measuring all income and expenses, it will be easier to see where you can cut costs and profit more.

Tip: The NOI will vary heavily between properties. You must consider the other costs, such as low rent and high expenses, to determine whether the investment is workable. You might find that the NOI creates a nice cash flow but the mortgage costs eliminate most of the profit. In this instance, any drop in the vacancy or sudden high expense could prove to be too costly.

So, What’s the Cap Rate?

You now have all the information you need to calculate the NOI. The next step is to figure out the ratio of NOI to property asset value. Let’s say a commercial property is available for a $500,000 purchase price and it has an NOI of $50,000. In this scenario, the cap rate is $50,000/$500,000 which makes for a 10% cap rate. 

What is a Good Cap Rate?

A good cap rate in one city might be a terrible rate in another. It is important to look at the market statistics for your area. Search for sales comps for similar commercial properties and see their cap rate. This will give you an idea of what you can expect and what it takes to be outperforming the local market.

However, generally speaking, 4% is a solid cap rate. Anything north of that figure will be a strong number to see. Any south of it needs further evaluation. A lower cap rate might exist as a result of a high level of vacancy. If that is the case, you need to determine what is causing the high vacancy. Compare the vacancy rate for similar properties in the area—if it is much higher, there could be more room to push the cap rate higher.

If you are a buy and hold investor, remember that your cap rate can go up. If it’s a growing market, the demand will increase and rents will go higher. The more income the property generates the greater the cap rate will be. You can look at predictive growth to determine what the cap rate might be in the next few years.

Calculating the Net Rental Yield

The Net Rental Yield is a figure that factors property expenses but not debt service costs. This formula is similar to the calculation for Net Operating Income. However, the one key difference is that your income tax costs are brought into the equation.

The Net Rental Yield is a good means of valuing commercial property. This statistic can be used to help investors avoid properties that have marginal profit potential. If the market goes down a little, a negative ROI might occur. This situation is very risky because it means a negative cash flow which pressures you to sell the property at a loss. Failing to sell early could lead to further recurring losses until you later sell at a bigger disparity.

Basically, you want to look at the Net Rental Yield as the true income value. You can then subtract your debt service costs from this figure to determine the actual cash flow. This figure is your investment return rate. From there, you will know precisely whether it is worth putting your money into the building or not.

To put it simply, take your NOI and subtract your tax-related expenses. You now have your Net Rental Yield. All that is not brought into the equation is your debt principal and interest payments.

Other Calculations for Commercial Property Value

Some other calculation methods that are used by commercial real estate investors include the Gross Rent Multiplier, Cash Flow, Gross Potential Income, and Breakeven Ratio.

These methods are not as effective as the Cap Rate or Net Rental Yield. However, each of these formulas are valuable at times. You can collect more data on the investment value of a property by calculating through each of these methods. You might find a weakness that doesn’t show otherwise. It’s better to be safe than sorry!

Gross Rent Multiplier

The Gross Rent Multiplier (GRM) is the ratio between a property purchase price and the yearly income it generates. The GRM does not take into account any expenses at all. This statistic is used to figure out how many years it would take to pay off the purchase price based on the gross rent figures. 

The GRM calculation is usually used by investors as a preliminary screening measure. You can determine whether the rental income generated by the building is too low. If you know it is relatively high, then you can break down the statistics further by looking at the expenses.

As an example… A property that costs $500,000 might generate $25,000 in rent each year. At this rate, it would take 20 years to pay off the $500,000. Of course, this statistic does not take into account any appreciation in rental rates either. It is not a super-advanced measurement of value but it does serve as a good screening method.

A quality GRM would be in the 4 to the 7-year range for rough markets. If it is in an in-demand, booming market, it’s okay for it to take longer to pay the property off. Receiving at least 1% of the purchase price in rental income every month would be ideal.

Cash Flow

Calculate the gross rental income for the year. Calculate the amount you pay for the mortgage with interest each year. Factor in how much the previous owner was paying for expenses annually. Include the vacancy loss amount on top of those expenses. Subtract all outputs from inputs to determine the property’s cash flow.

The cash flow decides how much money you will pocket on your investment. Some factors will play a heavy impact on the cash flow rate of a property. For example, a higher downpayment could give you a lower interest rate and mortgage payment. Your monthly cost will go down as a result which means you will pocket more profits every month.

You do not want to overextend yourself to increase your cash flow. Any money that you tie up could have been used elsewhere. A lost opportunity can be costly. You should use the “Cash on Cash” calculation method as well. Divide your invested capital by annual cash flow to determine your Cash on Cash return. 

In some cases, you might want to look for lucrative opportunities to reduce invested capital. For instance, the seller might cover the downpayment for you to seal the deal. Your invested capital would be much lower which could offset a higher mortgage payment. If you purely care about the property’s income potential, these opportunities are very appealing. You can build a nice portfolio of properties through tricky methods but it takes extensive research and planning to pull off.

Gross Potential Income

The Gross Potential Income takes into account what you might be able to generate for income from a property. You are not looking at the current figures so much as to what you could manage if you optimize your investment. For example, a property might need some repairs or renovations to increase the number of rented units. By investing in this capital you could increase the property’s income potential.

At bare level, the GPI is calculated by looking at a property with 100% occupancy. You must effectively value the rent rate for any vacant units. In most cases, this will be a simple measurement. A building might have a vacancy of a few months between tenants and always rent for the same amount. But, it gets more complicated if any units have been vacant for a long time—because there’s likely a (costly) reason for that. 

The GPI is a good figure to use when shopping the market for commercial real estate investment opportunities. You might find some properties that seem like a bad deal but their high potential income makes them appealing. You need to be careful when getting into one of these investments. Some will be major duds and cash burners, while others could prove to be the best real estate purchase of your lifetime. 

Breakeven Ratio

The Breakeven Ratio is a pretty effective measurement of investment value. It takes into account all of your operating expenses and also your debt service cost. This total is divided by the potential rental income. You can use this figure to identify how much the market can swing down before you start operating at a loss. 

A good ratio will vary depending on many factors. However, the ratio should be below 85% in most cases. This means you have a 15% safety margin where you can allow rent rates to drop by 15% and still be safe. Make sure you calculate this before investing in a rental property because it could save you from a catastrophic loss. The Breakeven Ratio is especially important in a bubbling real estate market where a downturn in prices is more likely.


Investing in commercial real estate can be tough at times. However, it is very much a numbers game. You can find profitable deals if you take the time to compare what’s on the market and crunch the data. The key is to be extra cautious before making an offer and making sure it is a good deal in every way possible.

So, consider your Cash on Cash return. Make sure you have a nice net cash flow. Take a shot on properties that have room for growth. Avoid the marginal investment opportunities. Also, do not feel like you need to find a deal today… A property might look nice but, if the numbers don’t add up, it’s not worth the risk.

How to Find Foreclosures and Seized Properties

How to Find Foreclosures

Foreclosures often represent excellent investment opportunities, but it can prove difficult to find them before other investors. What’s worse, many sites promise to show you a database of foreclosed properties in your area, but they’re often filled with outdated information that you have to pay to access. Instead of wasting time with such tactics, try these proven methods trusted by seasoned investors.

Attend Foreclosure Auctions

By far, one of the most direct ways to find foreclosure opportunities is to attend the auctions for foreclosed properties. However, without prior research, it’s easy to end up purchasing a foreclosed property that is worth much less than the bank price, which is why all avid investors should spend time in advance looking at the properties that will be auctioned.

Use A Foreclosure Agent

There are many real estate agents who specialize in foreclosures. The Balance points out, they “sometimes wait weeks while bank management approves the list price, so you can get a jump on other buyers by asking about new foreclosures not yet listed.”

Working with a foreclosure agent can certainly give you a leg-up thanks to their knowledge of your local area and first-hand access to the MLS. They can also schedule showings for you and handle other parts of the process on your behalf.

Look for Notice of Sale Filings

Once a foreclosure sale date is set for a property, a “Notice of Sale” is sent to the owner. A copy of the notice is also posted on the property, so simply driving around can lead to some foreclosure leads. However, if you want to skip the legwork, you can head straight to the County Recorder’s Office where another copy of the Notice of Sale will be put on the public record. Local newspapers will also publish this Notice of Sale over a three-week time period.

This gives you three other methods for finding foreclosures, with the most time-consuming certainly being canvassing neighborhoods by car. Checking public records will take time, too, but it’s much more direct than the former. Of course, if you want the foreclosure opportunities to come to you, subscribing to a few local papers will give you an easy way to learn about new foreclosures in a local area.

Stay On Top of Notice of Default Filings

A Notice of Sale will be published once a property has entered the foreclosure process, but you can also get ahead of other investors by checking the County Recorder’s Office regularly for Notice of Default (NOD) filings. A Notice of Default is put on record after a property owner has missed payments for three to six months.

The borrower could bring the mortgage current again with the reinstatement period generally running until five days before the eventual auction date. Pursuing an owner who is in pre-foreclosure status could be profitable and, in the event that they do not repay their balance and eventually enter foreclosure, you could be a step ahead of other investors who may only hear of the property once the Notice of Sale is finally published.

Check Government Listings

Today’s technology makes finding foreclosures easier than ever before. If you choose to check government and bank listings, you can forego paperwork and newspapers altogether, just be mindful that this method will only alert you to certain types of foreclosed properties.

Properties financed by Fannie Mae, the Federal Housing Administration (FHA), Treasury Department, and Small Business Administration (SBA) properties that are being foreclosed upon will be listed on the respective agency’s website. The department of Housing and Urban Development (HUD) maintains a page that links to the various online listings for different agencies.

Check Bank Listings

Similar to how some government agencies list their foreclosures online, some major banks do the same. If you are interested in pursuing bank-owned foreclosures, check the online listings for major chains like Bank of America, Chase, Wells Fargo, and U.S. Bank.

Utilize a Virtual Search Tool

The use of technology is certainly gaining ground as more investors realize the time-saving advantages it brings to the table, but searching on agency websites still isn’t necessarily the fastest or most efficient way to find foreclosures. Aside from having to search across a dozen different sites to find viable leads, the search process can also prove extremely tedious–especially if you have specific parameters in mind for the foreclosures you’re interested in.

That’s where a platform like ProspectNow will come in handy. With the help of predictive analysis, this tool will take the legwork out of finding your next investment opportunity. ProspectNow collects information from a number of databases and puts it into one intuitive dashboard where you can find pre-foreclosures along with the property that is predicted to sell in the next 12 months, giving you a range of potential investment opportunities.

When it comes to pre-foreclosure investment, ProspectNow will also give you easy access to names, phone numbers, and even email addresses for property owners, allowing you the potential to purchase properties directly from their respective owners before foreclosure proceedings even begin.

Find The Most Opportunities

Expert investors know that the best way to find the most opportunities is to come up with a strategy that works for your needs. The days of driving around and even checking local newspapers are coming to an end thanks to the many other more efficient methods of locating foreclosures and seized property in a lot less time.

Since every hour you spend searching for opportunities ultimately affects your profit, considering looking into an all-in-one tool that will improve your productivity and help you find properties faster. Click here to get started with ProspectNow for free.

A Comprehensive Guide: Real Estate Branding

Real Estate Branding

Real estate branding requires a lot of hard work. You need more than just a fancy logo and a catchy motto to become one of the industry’s renowned players. You must be creative to relay a consistent message that portrays your image and identity. You also need a story that resonates with your clients and embodies what your business is all about.

You are not the only one privy to this information. So how exactly do you stand out among the several other real estate agents? You need an effective branding strategy that employs the effective use of social media platforms and connects with the audience.

This article outlines seven branding secrets prosperous real estate agents apply to become the industry’s top leaders.

Start With Data

Analyzing all the essential information about your resources is not only helpful to you but also to your client. Clients go for less risky deals, and detailed information will attract lots of them.

As an investor, you have no trouble controlling your system and answering customers’ queries. You, therefore, need to analyze all the data related to your product and present it in an easy to comprehend format. Have all the information about prospective clients and your area of operations.

Create a Client Avatar

With a client avatar, it is tough for a client to ignore your services as you have pre-examined them. Before you meet your prospect in person, you should try to figure out who they’re going to be. Some may be a retired couple looking for a smaller home, while others, first-time buyers. Imagining yourself as the client and making reasonable consideration for each case is something very few agents know about.

Before you set a price, think about what your ideal client’s age and occupation. What about their budget? Do they have other family members and pets? Would they like an extra gardening space? Think about what might make you, as a client happy, what problems you are likely to encounter, and offer ultimate solutions.

Create Your Unique Selling Proposition

A Unique Selling Proposition is an advantage that makes your services outstanding from your rivals. Do not communicate the same message as every other website. With a similar message, you won’t be able to claim a specific factor as being only offered by you. Prospects will know if you’re copying an idea from elsewhere and run away from you.

A unique selling Proposition will also minimize customers’ questioning your prices. Those who fail in real estate business do so for lack of transparency. When you have clear reasons for selling your products at a specific amount, clients trust you more.

Start Branding Your Business

Generally, branding requires a lot of attention and professionalism. If you make repetitive branding mistakes, which are hard to notice, your business may collapse in a very short time. When done correctly, either by you or with the help of an expert, brand building can be more like a get-rich-quick-scheme.

Before you start building your business brand, you should put into consideration two factors; business strength and your interests. You may have many real estate services under one business, but there’s that branch that sells like hotcakes. Then, there’s a part of the business that you are more interested in pursuing. Does selling homes as you meet new people seem like a hobby for you?

Branding is the only part of marketing that requires little or no capital at all. You go for what you want on the internet, which has made it more accessible. When building your business brand, think of starting with your website before you proceed to social media platforms. Potential buyers, before visiting your LinkedIn or Facebook accounts, will first land on your website. Therefore, you need to upgrade the website according to modern technology. A website that interest customers is attractive and smartphone responsive. Up to 72% of the prospective clients will be using mobile phonesto access the internet in the 21st century.

Go Online – Add It to Your Marketing Materials

If you truly desire success in your business, the big secret is making a consistent online presence. Share your products and services, related articles, and actively participate in groups and pages related to your niche. You will be able to meet veterans in the business, gain insight and inspiration from them as you meet potential clients.

Real estate is very delicate; thus, most clients either want referrals to a legit dealer or meet you in person. For this reason, do not use pseudo-accounts since it brings doubts about you. Add professional profile photos on each of your accounts and include links to them on your website.

Promotional Materials

A successful agent knows the importance of continuously adding new leads to their database. They also understand that it is equally important to keep the existing clients coming back. When treated well, clients recommend others to services, and this means increased revenues.

An excellent way to lure new and existing clients is through giveaways. It may be seasonal, or a small gift after each deal. For instance, after selling a house, you can offer to re-paint it for free! Inexpensive gifts like pens, notebooks, key holders, or portfolio envelop with your logo are suitable for a start.

Use Billboards

So far, using billboards to generate leads is the most creative way of increasing real estate sales. In less than three seconds, you can communicate everything about your business. When making a billboard, use big and brightly colored fonts. Include your contacts and do not overcrowd the advertisement with too many words and logos. People will ignore your message if they have to look for your contact for over a minute on a busy highway.

Again, a billboard should be about the client, not you. Use an encouraging four-word sentence that covers the entire message. Remember, the message should match your targeted prospect.


Becoming a top-rated agent in the real estate competition is not a walk in the pack. A handful of hidden ideas need to be uncovered first before you real your goals. Putting into practice these tips will drive your business into a competitive edge, and you will never regret it. 

At ProspectNow, we’ll help you design a strong marketing brand that’ll help increase your ROI. Give us a call today or schedule an appointment with our professionals to get a great deal.

Best Places to Live in California

Best Places to Live in California

Approximately 40 million people live in “The Golden State”.

California ranks first in public health, fourth in higher education, and fourth happiest overall out of the 52 states. The population is constantly growing, the scenery is beautiful, and the amenities are endless. It is without a doubt one of the most attractive places to live in the whole country.

However, there are more people in California than there are in Canada. The state is over 163,000 square miles (third largest) and the quality of life varies depending on where you live. US News ranks Bakersfield (124th) as the second worst large metro area to live in America. Yet, their list also puts San Francisco (7th) and San Jose (14th) as appealing options.

The quality of life that makes California so desirable does come at a cost. The list of the 10 highest cost of living cities in the country includes five places in California—San Francisco (2nd), Oakland (6th), San Jose (7th), San Diego (8th), and Los Angeles (9th). 

If you can afford these areas, where exactly should you move?

California Real Estate Introduction

Before comparing neighborhoods, it is good to learn more about the market. 

The cost of houses here is high and increasing on a year-over-year basis. $549,000 is the median listing price and $502,600 is the median sale price. $2,800 is the median monthly rent. Seven years ago, the median house price was around $300,000 but the state’s growth has brought prices up tremendously. 

California Homes Sell Fast

Oakland and San Jose are experiencing strong growth. Homes come off the market in an average of 36 to 38 days. Vacancy rates and unsold inventory is dropping in most areas. Good deals are drying up with growing demand and constant immigration to the state’s most attractive cities. 

Some areas are seeing a slowdown in sales and an increase in inventory. Los Angeles as a whole is in a “cooling off” phase after many years of substantial growth. Housing prices are mostly flat and inching up incrementally. But, the best places to live in California are still very in-demand and are generally not following the stagnation trend. 

A cooling market in California isn’t like anywhere else…houses are still selling in an average of 32 days vs. 87 days in Chicago which is currently a hot seller’s market. 

Most Desirable Cities to Live in California

The best place to live will depend on your situation. Some areas are better for young adults or entrepreneurs, while others are more beneficial for families or retired people. The state has a lot to offer and it’s hard to rank the top cities. 

The list below contains some of the best places to live in California. Use your own judgment to decide which place best suits your needs and wants. There are many beautiful neighborhoods in each of these cities worthy of calling home.

San Francisco

San Francisco continuously ranks on the top of lists ranking the best places to live in the United States. According to Redfin, sales prices are $1.5 million on average (up 7.1% since last year) and sellers get 9.2% above their asking price. Inventory is moving after being on the market for only 19 days.

Some reasons to live in San Francisco include:

  • Home of the Golden State Warriors (NBA) and Giants (MLB)
  • Ranks 1st in the nation for startups and venture capital
  • Home of Stanford University, a top-3 university nationwide
  • A very accepting LGBT culture

Let’s not forget the beauty of the area:

  • Home of the enfamous Golden Gate Bridge
  • Home of the notorious Alcatraz Island
  • Lively waterfront at PIER 39
  • San Francisco Zoo (100 acres)
  • Golden Gate Park (1,000+ acres)

San Francisco is approximately 49 square miles in size. The population is nearing 1 million. The city’s planning department identifies 36 official neighborhoods. The amenities, cultural vibes, and lifestyle vary dramatically depending on where you live.

Learn more about neighborhoods in San Francisco and figure out which area is best for you to live. The city has a high cost of living but is a tremendous place for young adults, families, and retirees. 


Pasadena ranks on numerous lists as one of the top 100 places to live in the United States. This city is much smaller with less than 150,000 residents. The median home price is $829,200 which makes it more affordable than San Francisco. 

Some reasons to consider moving here:

  • 30 minutes from Los Angeles
  • Home of the Rose Bowl stadium
  • Home to the prestigious California Institute of Technology (Caltech)
  • Near the beautiful Eaton Canyon Falls Trail
  • Ranks as one of the top 30 cities for young professionals
  • Busy nightlife scene that appeals to all crowds

Families will also enjoy living here. The Kidspace Children’s Museum sees 378,000 visitors annually and is located next to the Rose Bowl. The Huntington Library, Art Museum, and Botanical Gardens are also all great places for families to visit with kids young and old.

Manhattan Beach

The median price for a home here is currently $2.4 million. The city is in a buyer’s market with properties listing as much as $400,000 above the median sales price. Back in 2013, the median price was only $1.4 million. The exponential growth and influx of people wanting to live in this small area is responsible for the rise in housing prices. While sales are stagnating, no one is rushing to move and experts forecast more price growth.

Roughly 35,000 people call this city home. The area is less than four square miles. It is a desirable place for retirees to live. The city has a median age of 44 which is much higher than the state average of 36 years old. People in the area take advantage of the beautiful scenery and regularly walk, bike, or play sports on the beach and waterfront. 

Not sure if this is the perfect retirement spot for you? Stay in the area at the Belamar Hotel, Best Western Plus, or Hotel Hermosa. Get a feel for the community and enjoy the area for a few days. Take a stroll down the coast as well. Hermosa Beach is direct to the south and provides a similar living experience.

Another plus: the LAX airport is only a five-mile drive away.

San Diego

San Diego has a median home price of $593,700 which makes it moderately affordable. The better parts of this city will come at a steeper cost. With a population of over 1.4 million people, there is no doubt that housing prices range dramatically from one neighborhood to the next. 

Here are some reasons to live in San Diego:

  • Home of the Padres (MLB)
  • Home to San Diego Zoo, Balboa Park, Seaworld
  • Historic sites at USS Midway Museum
  • Cabrillo National Monument
  • San Diego Zoo Safari Park
  • Swimming and scuba diving at La Jolla Cove

Check out this guide to San Diego neighborhoods to get an idea of what area is best for you to live. Torrey Hills, La Jolla, Kearny Mesa, and South Oceanside are some of the best places to live in the city. The lifestyle and amenities vary dramatically depending on where you choose. Visit these different neighborhoods in person to get a better feel for them before shopping for real estate.


Finding the perfect place to live in California takes a lot of work. The options are endless and the right choice depends on your lifestyle. You can find the perfect place for families, young entrepreneurs, retirees, LGBT acceptance, etc. 

Your first decision should be how much you wish to spend on a property. The cost of living will vary dramatically depending on the city (and neighborhood) where you buy your home. You will need a fair-sized budget and strong income to afford the nicer parts unless you decide to live further away from the main metro areas. 

Be selective when making your investment. Going for the cheapest areas will put you and your family in a bad situation. Crime and safety is an issue in many of the impoverished areas in this state. The financially stable regions come at a cost but can guarantee a better quality of life and security for you and your loved ones. 

If you want to find a great deal, try for a foreclosure. You can get free trial access to ProspectNow and check for properties in a specific neighborhood. This tool will help you find places that are either in foreclosure or are likely to foreclose in the near future. You will also be able to find places that are likely to sell soon—before the owner lists them.

About the Author

I have a lot of real estates investing knowledge. I am an avid reader on the Bigger Pockets forum and regularly analyze various Canadian markets. I understand the mortgage side and have expert-level experience writing on home loans & personal finance.

Jason S is a freelance writer who writes about business.

A typical day in the life of a Listing Agent

Listing Agent

The role of a Listing Agent comes with many responsibilities. 

Your job is to provide the services that your sellers and buyers need. You must have marketing and research skills to consistently bring new clientele. It is an overwhelming job in many ways. But, it is a very rewarding profession if the initiative is there. 

It is important to remember that not every day will be the same. 

Your journey will be full of surprises. Much of this job is about doing and thinking “on the fly”. Your ability to be creative and adapt to any situation is what will differentiate you from the amateurs.

Ultimately, the duties of an agent will perform on any given day fall into one of these three categories…

1. Dealing with Sellers

2. Dealing with Buyers

3. Marketing & Research

For a better idea, check out the list below covers many of the tasks that a listing agent handles on a day-to-day basis. 

Dealing with Sellers

You need a property to sell to make money. The real estate company you work at might be large enough to naturally attract sellers. If not, you must do the legwork and locate owners that are looking to sell. This process takes a combination of marketing and research expertise. 

Identifying Targeted Leads

Running a general marketing campaign is not cost-effective. You do not need to pay for billboard space or radio ads. The best way to market your services is by finding those that actually need it. From there, tailor your marketing efforts toward those individuals. 

How do you find targeted leads?

  • Buy a list

This post goes over some of the many types of real estate lead lists that exist. Many services are available for agents looking to purchase leads. Here are six lead gen services that listing agents regularly use. You can expect to pay approximately $20-60 per lead or $300-600 a month. 

  • Generate a list

ProspectNow provides the research tools to find targeted leads. The software includes a built-in residential and commercial database, detailed property records, and more. Agents can search and find likely sellers and refinances in any area. Reaching out to the lead is easy as their contact information and some marketing tools are built into the software.

  • Door knocking

You have nothing to lose by going door-to-door to promote yourself. Many listing agents use this marketing technique. The frequent rejection is disappointing but it will pay off. The big appeal of the door knocking strategy is that you can limit your services to one area.

Figure out what the market is like in the neighborhood before you start. Have a business card or pamphlet to leave the homeowner. Reference any properties nearby that you sold for clients in the past. Have sales comps ready. Make it known to the prospect that you are serious and ready to make it a stress-free experience.

Read here for more advice on how to do this successfully.

  • Direct mail

You should have a good idea of what neighborhood you want to target. You can advertise through direct mail based on the recipient’s street, zip code, etc. You will pay a bit more since your conversion rate will be lower. But, you can always limit your direct mail marketing to your targeted leads. For example, send out your mailers after building or buying a list.

Many lead generation tools—including ProspectNow—provide a direct mailing feature. You will be able to easily promote your services to your targeted leads. Check out these six direct mailing services if you prefer a standalone tool with extra functionality.

  • Networking

Many real estate-related professionals have more insight than you. The city and county inspectors are two great examples. These people often know when a property is likely to sell and stands a good chance of going far below market value. For example, it’s a “likely sell” (highly targeted lead) if the owner’s property has liens and needs repairs.

Local attorneys can also help you out. Deal with lawyers that practice family, real estate, or bankruptcy law. Also, work with estate/probate attorneys. These professionals know when a property needs to be sold. Whether it’s due to a divorce, death, or otherwise—a property needs to be sold and the attorney will want to act fast.

You stand a good chance to find lucrative investment opportunities through your networking efforts. You might profit more from wholesaling the property because of the margin between market value and asking price. 

Want more ideas? Read “Ten Best Practices to Find Find Motivated Sellers Now” 

Closing on a Lead 

You find your leads, you market your service, and now you must close the deal. The last piece of business in your negotiation is figuring out an appropriate listing price. After that, you can work on making the arrangement official. 

Setting a Price

You are responsible for determining a fair listing price and getting the approval from the seller. Your recommendation is made after completing a comparative analysis of similar properties. Some variables you need to consider include recent sales prices, location, and how fast properties are selling in the area.

You need to suggest a price that is fair for both the buyer and the seller.  

The health of your city’s real estate market will also be a factor. How fast are places selling in your area? How are the prices trending on a year-to-year basis? Did anything change in the area to increase or decrease demand? 

All these factors, and more should be brought into consideration.

More tips on setting an asking price.

Getting under Contract

You and your client need to work through the terms of sale together. This information will play a fundamental role in how your lawyer writes your listing agreement. Your agreement conditions will not vary too much from client to client.

Some common variables in a listing agreement include:

  • Commission charge
  • Exclusive right to sell
  • Duration of contract
  • Duties of the agent
  • Sales clauses

Check out this article for more info on what a listing agreement might include.

Marketing the Property

You are responsible for marketing the property to potential buyers. The two most important steps here are photographing the property and creating the listing. You will want to look for alternative means of getting attention to the property as well. 

For example, you might promote it on Facebook Marketplace or a local classifieds website. You may also want to run a PPC ad campaign to your website and target buyers by their desired neighborhood. 

Want more ideas? Check out “35 Easy & Effective Real Estate Marketing Ideas”.

Photographing the Property

You should enlist the help of a professional photographer in your area. Quality pictures make a major difference. The camera plays a big role but an expert photographer will know what angles to take. The cost of paying an expert will vary by location. For example, photographers in Georgia start at $100 but the entry level cost is $250 in Miami.

The only argument against hiring a photographer is if it impacts your bottom line. A property in an undesirable market might sell for $30,000 which pockets you a $1,800 at a 6% commission rate. Your expenses are taken off of this amount. In this situation, you might prefer doing the photography work yourself. But, leave it to the professionals when you are selling a $500,000 home and stand to earn $30,000 in commissions.

List the Property

You need to list the property where potential buyers are likely to find it. Some of the most popular real estate websites include Zillow, Reatlor.com, Redfin, and Trulia. View this list of real estate websites to get a few more ideas. You will need to create an MLS listing as well. Read this page you want to learn more about how the MLS works and why it matters. 

Build Awareness

You need to put up a yard sign on the front lawn of any property you are trying to sell. You might want to put some signs up on a busy nearby street to direct traffic toward the property. Standard signs indicating a house for sale down the road are fine. But, you should also put up “Open House” signs for the week leading up to an open house viewing. 

You should also be active over social media. Build a Facebook page and promote your new listings. Provide general insight into the local market and new developments in your city. Tailor your page to the neighborhood you work in if you are specific to one area. Post new listings and encourage others to share. You can always offer a “finder’s fee” of $250-500 if the buyer is referred by one of your followers.

Dealing with Customers

You spend a fair bit of time working with the seller. After that, you focus on promoting the property. Some of that effort will translate to buyers approaching you. But, it’s important to be proactive and try to find buyers as well.

Building a Buyer List

A buyer list takes time to build but it’s incredibly valuable for your business. Your list should consist of both retail buyers and investors. Your best case scenario is having a range of potential buyers that are interested in one specific neighborhood. You can approach sellers and confidently say that “I might already have a buyer for your asking price”. 

Your retail buyers are one-off investors. These people might bring more sales through word-of-mouth but that’s rarely the case. You should be automated with how you bring in potential buyers. For example, running ads like “Planning to move here? Get first dibs on fresh listings!” Your goal is to get these prospects onto your mailing list so you can promote properties that suit their needs when they go up for sale.

Your investors are long-term partners. These people could be looking for homes in despair to renovate and flip. Many investors are looking to accumulate properties that have positive cash flow so they can increase their net holdings. You should read about building a buyer list to better understand this subject.

You might also have selling agents in your list. What’s the difference between a listing and selling agent? The listing agent helps the seller while the selling agent helps the buyer. Both parties are charging their clients a fee. Networking with selling agents makes sense because both of you have the same ultimate goal.

Showing the Home

Listing agents are responsible for showing their properties to prospective buyers. Private viewings are common but so are open houses. You need to schedule 1-2 hours for this viewing. Your MLS sheet needs to be on-hand and you must be fully prepared to answer any question. Your competence can make or break the deal. 

You will find yourself bouncing between properties on the weekends. These viewings are time-consuming, especially when you have a handful of properties up for sale. You should be selective about which listings you promote this way. Your highest value deals should get priority. An open house serves as a great way to stir up competitiveness in a seller’s market—and get a bidding war started if interest is skyhigh.

Closing the Sale

You need to be enthusiastic and confident when closing on a sale. Many buyers let go after initially committing to a deal. You need to be supportive and happy for their choice. This level of positivity should be the same whether it’s a mansion or a property that needs a lot of repairs. This post focuses on the psychology factor when closing on a deal. 

You must help finalize the transaction. The purchasing agreement is the last step in closing the deal. Some buyers fall through after this contract is done up. If this happens, it’s back to trying to sell the property. If the sale goes through, you will receive your commission. 

How ProspectNow Helps Listing Agents

ProspectNow offers listing agents a platform built on machine learning that helps to find properties that are likely to sell or refinance. This software contains information for over 100 million homes, 40 million commercial properties, and 30 million companies. The predict analytics is proven to work and provides dependable results. This tool also provides the contact info for the property owners which helps to further streamline the lead generation process.

You will find more helpful features too. ProspectNow provides listing agents with more than just the lead generation components. In the same tool, you can manage both your digital marketing campaigns and your sales comparison analysis. 

Get started with our free trial to see how beneficial our product is for you!