Real Estate Investing - Advertise the Property

Definition (Advertise): To describe or present a product in some medium of communication in order to induce the public to buy.

There are many different methods of advertising that you can use. The goal is to find the ones that will work best for you in your area. In this section, several methods that have proven to be successful will be outlined.

They are:

• Newspaper advertisements.
• For Sale By Owner publications.
• Word of mouth.
• Internet advertisements.
• List with a real estate agent.

Newspaper Advertisements

Advertising in the newspaper is a popular method used by real estate investors. A newspaper circulates to a wide area and has many subscribers. This is important because you want to reach as many people as possible. Advertising is a numbers game. The more people that see your ad, the greater the chance of finding a buyer.

When writing your ad, try to make it as interesting as possible. Make the property seem so appealing that the person that reads it just has to call. Grab their attention. Buyers don't call the ad that seems like all the rest (boring). They are looking for a great deal. That's your house, tell them!

Here is an example of a boring ad:

3 BR, 1 BA in Colonial Heights,
many repairs, $80,000. 555-1111
Call and leave message.

There are many problems with this ad:

First, people do not like talking to answering machines. They are calling to speak to the owner. Use a number where you can be reached.

Second, it has no excitement. It might as well say, "BLAH, BLAH, BLAH". Spice your advertisement up a little.

Third, make the price seem lower. Instead of $80,000, use $79,900 or 79,000. There is not much difference in price, but people will view it as being in the 70's and not the 80's. It’s a marketing technique that is used quite often.

Fourth, tell them about the repairs. "Many repairs" is too vague. Your house has new flooring, kitchen, A/C, etc. Let them know it. Most properties in the newspaper do not have any upgrades. The average person that sells their house will not remodel it first. If they did, they probably would not move. Therefore, your house is a better deal.

Here are a few advertisements that should work better:

A Charming 3 BR in Colonial Heights
Completely remodeled, new kitchen,
Central A/C, new flooring, windows,
Fenced yard, must see. $79,900, will
pay closing costs. 555-1111

A Completely Remodeled 3 BR in quiet
neighborhood. New kitchen, A/C, carpet,
windows, hot water heater, electric. Must
see! At $79,000, instant equity. 555-1111

Buy For Less Than Rent. Cute 3 BR in
Colonial Heights, completely remodeled.
Excellent starter home. Must see!
$69,900 @ 7%, P + I is only 465/mo.
CALL NOW FOR DETAILS. 555-1111

Notice how each advertisement makes the property sound like a great deal. This is the way it's supposed to be. You want the reader to be intrigued. If they are not, they will never call.

While these advertisements have the same goal, each targets a different group. The style that you use will depend on the property. For example, the last ad quotes principal and interest payments. This is designed for a lower price range property. Hopefully people that are paying more to rent will see this and call.

If you do not have access to a payment chart and would like to advertise a principal and interest payment, call a mortgage person. They will be able to give you a base quote. There may also be taxes and insurance that the buyer will have to pay. Be aware of it but don't advertise it. These are not part of the loan. They are part of escrow. The idea is to make the payment seems as low as possible.

These are just example of the advertisements that you may use. Be creative and tailor your ad to each property you own. Make the reader want to know more about the property.

For Sale By Owner Publications

Most areas have an organization that distributes a For Sale By Owner (FSBO) magazine. These are normally free to the public and include listings with photographs and descriptions.

FSBO magazines are a lot like newspaper advertisements. The wording can be the same, both reach out to the independent (no real estate agent) buyer and the ads are usually similar in cost. The difference, and often the advantage, is that the FSBO magazine will allow photographs for an additional charge. Newspapers will rarely, if ever, do this.

The decision of whether to use the newspaper or the FSBO magazine (or both) to advertise is usually based on three questions:

1. How large is your advertising budget?

If you are under budget and can afford to advertise in both, you will increase the number of potential buyers that see your advertisement. If you have less to spend, look closely at which is the most cost effective. This may be unclear in the beginning but as you sell each property, keep track of how the buyer discovered your house. Spend your advertising dollars there first.

2. Which one works better in your area?

Track the number of calls that you have received in the past from each advertisement. You may find that one of the methods is not as productive. If this is the case, allocate less money to it.

3. Is a photograph beneficial?

If you have a property that is very eye appealing in a picture, use the FSBO magazine. A picture will often grab a buyer's attention. As stated earlier, this is only available in the FSBO magazine.

Word Of Mouth Advertising

Let people know that you have a house for sale. The more people that know, the faster it will sell. This pertains to both friends and property neighbors. Your friends will want to help you if they can (especially if there is a finder's fee paid). The neighbors would like to be able to choose their new neighbors. This insures that the new occupant is acceptable to them.

When you first buy a property, go to the neighbors and introduce yourself. Explain what you are doing. Remember, fixing up a neglected house will make the community look better (and increase the values). You are doing them a favor. If they see the progress, they will be more likely to refer a friend or relative to you.

Passing out a flyer around the area is another good idea. It lets people know what you are doing and gives them a chance to PICK THEIR OWN NEIGHBORS. You may also offer a referral fee if they find you the buyer. This will give them even more incentive to help you.

The bottom line is that you have to let people know. Word of mouth is free advertising. Take advantage of it.

Internet Advertisements

The Internet is an ever-expanding means of communication. It has been improving and growing at an unbelievable pace. Advertising your investment property on ABetterWay.com allows you to reach a nationwide audience of Buyers and Real Estate Agents at no charge to you.

List With A Real Estate Agent

If you are uncomfortable selling or do not have the time to answer calls, let a real estate agent do it for you. Using a real estate agent has several distinct advantages:

First, you do not have to search for a buyer all by yourself. There will be hundreds of agents that would like to find a buyer for your property. That is how they get paid.

Second, real estate agents have access to the Multiple Listing Service (MLS). As described in Section 2, this system contains properties that are for sale in your area. All real estate agents have access to it. When they have a potential buyer, they will enter certain characteristics into the computer, and if your listing matches it will print out the details.

If their client is interested, the agent will show them the property and hopefully make the sale. You don't have to do anything. The agent will handle everything (writing the contract, setting up the closing and any other details).

Third, a good real estate agent knows how to market the property and handle the potential buyers. Very often, the prospect will need a little push or reassurance that they are doing the right thing. Real estate agents give you the experience in dealing with these types of people.

The only real disadvantage with listing your property with a real estate agent is that you must pay a commission. Real estate agents do not work for free. A typical commission on a sale is a percentage of the sales price will go to the listing agent and to the selling agent (the one that actually finds the buyer). Occasionally, you can negotiate a lower amount but don't get too cheap or an agent may pass your house up for one that pays a higher commission.

Some areas will allow you to list your property on the MLS without going directly through an agent (the Internet and FSBO magazine may offer this for a small fee). The drawback is that you will still need to answer real estate agent calls when they need information about the property. You should give them all the information that they need, after all, they are helping you.

The method of advertising is up to you. These are just examples. Be creative. If you can find better ways, use them. The main thing is to let people know. The more who know, the quicker you will sell your property.

When you should advertise is a debated question. Some investors will wait until the property is completed while others will do it earlier. There are advantages and disadvantages to both.

If you advertise early, you can give the buyers more involvement in their new house. They may chose the color of carpet, the kitchen cabinets or any other upgrade. It also saves idle time. Every day that the house is empty, you are paying interest and insurance. The main disadvantage is that they have to be able to imagine the finished product. Normally the houses are not in prime condition. This may turn people away.

If you advertise at completion, it is more aesthetic. Buyers get a better first impression. They do not have to visualize the end product. It's right in front of them. The disadvantages to waiting are that the buyer may want different upgrades and the turn over is often not as quick.

You need to determine the timing for yourself. Try it both ways and do whatever works best for you.

Tips for Advertising the Property:

• Make your advertisement interesting. If it is not, readers will likely pass right over it.
• If possible, start the ad with an early letter in the alphabet (A, B, C). Most are printed in alphabetical order. This will get your ad read first.
• Make the ad fit the property. Give the details that will attract the right type of buyer for your house.
• Use the FSBO magazine if your property has good curb appeal. It will grab the reader's attention better than just a written article.
• Track the effectiveness of this method in your area. Spend your advertising money wisely.
• Let as many people know as possible that you are selling a house. You never know when you'll get lucky.
• Research the current ways to advertise on the Internet. These will change over time, so continue to look for new opportunities.
• If you are not a good salesperson, let a professional help. A good real estate agent can save the deal for you.
• Be sure to include the commission when you determine your listing price (if selling through an agent).