Did you say “Location, location, location”?
You guessed it. This still holds true for “traditional buyers and sellers.”
For years, this concept has been repeated so frequently that it has seeped into the very seat of investors’ consciousness. So today, investors set out to find a property that will earn cash flow, and focus on finding a great location. So finally, in a great high-end area, they find that property and begin the search for a tenant. They want a long-term tenant, so that cash flow is consistent and predictable. Then a few years down the road, they realize something. It’s not as easy as they had thought to find the tenant they want, and there is a high tenant turnover rate. Frustrated and tired, they think about how they once envisioned tenants lined up, ready to rent their property with long-term leases, not someone who just needed a temporary place to stay while looking for a house to buy in the area (tenants in transition). But in an affluent community where location, location, location was fulfilled, most likely people do not rent long-term; they usually buy. So what went wrong?
The investor went wrong by thinking like a traditional homebuyer. Location matters, but for investors, a tenant matters more. The tenant is the customer for your business (the investment property). As a savvy real estate investor, you should begin by finding out where tenants are looking to rent; where demand already exists. Search areas and give tenants what they’re already looking for.
Don’t begin by looking for the location first. Start by deciding which one of the three tenant types you want, then you’ll know what that tenant type is looking for in a property and where. THEN and only then should you go out to look for a property in that area where the tenant already wants to rent. Unfortunately, some investors end up with empty investment properties because they don’t think about the tenant first.
So remember: Start with the end in mind. What type of tenant do you want? Starting with the end in mind is even one of the 7 core habits that Dr. Stephen Covey wrote about in his international bestselling book, “7 Habits of Highly Successful People.” Once you start matching investment properties with what tenants are already looking for, you’ll not only save time and money searching for tenants, but your property will continuously be rented, giving you the cash flow and profits you want when you want them.
About Tahani Aburaneh
Tahani Aburaneh is Canada’s leading female real estate investing expert and founder of Savvy Investor Agent Certification (SIAC), specialized training that teaches real estate agents how to tap into the rapidly growing investor niche using proven step-by-step systems and tools so that they can generate a constant flow of closing deals, differentiate themselves from other agents, and exponentially increase their commissions. Tahani is also an international speaker and author of the Amazon Best-Selling book Real Estate Riches and Savvy Investor Agent Guide. Having battled adversity since her birth in a refugee camp, Tahani is a living testament of how anyone can rise above the odds by focusing on helping others. Learn More.