The Art of Rental Income Property Marketing
As a realtor whose real estate business solely relied on selling rental income property, effective marketing was a necessity. After all, it always boils down to the sale; even with a hundred listings, no sale, no paycheck.
It always seemed paradoxical to me, therefore, that some real estate agents, after spending so much time and effort to list investment property, devoted so little time and energy to market and sell it. Colleagues posting bits and pieces about a rental property (e.g., price and number of units) hoping to generate an offer, rather than creating a package with enough financial data to arouse meaningful interest from a real estate investor.
If you're a residential real estate agent who works with rental income property guilty of just throwing your rental property listing out there, then read on. I want to suggest a couple of improvements you can make quite easily that might give you a better shot at actually making the sale.
Aside from the sale price (which is a given), think about providing an itemized break down and computation for the annual cash flow and computations for at least two rates of return.
1. Cash Flow
The cash flow is important because it's essentially what the real estate investor is purchasing in the rental property. So compute it for at least the first year of ownership by focusing on the following three financial elements.
- Gross Rental Income
- Operating Expenses
- Debt Service
2. Rates of Return
The rates of return (at least the two listed below) are important for the investor to determine whether or not his or her yields are met and a good way to compare the property's financial performance and value to other similar-type rental properties in the market area.
- Cap Rate
Here are two reports that I used quite successfully to respond to initial inquiries about my income property listings. In this case, the Marketing flyer makes realistic assumptions for the property's potential future financial performance and the APOD uses the property's actual current numbers.
1. Marketing flyer
This announces the listing to the community-at-large (i.e., investment meetings and call-ins from colleagues). Preview sample...
This enables you to show your own investor-customers what to expect during the first year of ownership. Preview sample...
So You Know
My objective is to help you make better marketing presentations by including more information about the rental property's financial performance, not necessarily fancier presentations. Concentrate first on supplying the numbers I suggest, than on a way to present those numbers in concise, easy-to-read reports. It helped me build and maintain my real estate investment business during my tenure as a realtor, and I know it will yours.
Here's to your success.