Real Estate Investing
Real Estate Investing and Marketing
Marketing is something everyone loves to hate, but you can't get around the fact that very little gets sold without it.
Definitions vary, but marketing is roughly the development and execution of a strategy to sell something - which includes research, advertising, promotion and sales.
Good marketing starts with good research. Finding out current prices for comparable property is essential, but there's also a time factor involved. Real estate, compared to most other investments, is a longer term investment. Stocks can be sold in minutes, a property takes weeks at best to rollover.
That means it's important to know local market prices before the property is purchased, while it's being prepared and advertised, and all during negotiations, some of which go on for weeks or longer.
You need this data in order to judge whether the current price is one which allows you to turn the property over at a profit, but also in order to know whether and where to compromise during negotiations. The stated price of a property, after all, is only one factor in the total. Are you going to pay for those needed repairs or does the buyer? And who will pay which, and what percentage of, closing costs? These numbers can and will vary depending on local market conditions, which can only be known by good research.
Advertising, too, is a key part of a marketing strategy. You need to attract as large a pool of real potential buyers in order to create a competitive bidding scenario. Those 'just looking' don't count as real potential buyers, especially if they don't have solid financing. That's another research item for the list.
Advertising, like most business today, has expanded far beyond traditional boundaries. Word of mouth is still helpful, as are local newspapers and specialized trade publications, but the added 800-pound gorilla today is the Internet. With Local Search and new image library features, most search engines play a far larger role than in years past. And that role is growing.
Internet sites devoted to real estate investment have grown dramatically in the past few years, and show no signs of leveling off anytime soon. For Sale By Owner (FSBO) sites, realtor specific sites showing properties, mortgage financing and a dozen other categories have blossomed on the web.
A good marketing strategy will take advantage of that and devote considerable resources to advertising on sites with good traffic (the amount of which can be discovered by - you guessed it - research). Take advantage of all the technology available and add clear interior and exterior photos, 360 degree views, and video of the property and the surrounding area.
Two of the key benefits to having a good marketing strategy is the ability to move inventory and control costs while doing it.
In order to be a successful investor you have to be able to find a property that can be turned over in accord with your time table and at a profit. Even long term investors need to find properties that are undervalued, then promote and sell them for more than their accumulated costs. A good marketing strategy is essential for achieving those goals.