Investment Property Focus: Establishing a Competitive Edge in Investment Real Estate
Investment real estate is a competitive business, particularly in large urban centres like Toronto and Vancouver.
Real estate investors and developers who want to stay ahead of the opposition need to find new ways to play the game.
Establishing a competitive edge means being innovative and looking for novel methods to find business or ways to strengthen your negotiation capability.
Property data tools can be the key to developing this edge. Here’s how:
- Knowledge is power.
The more you know, the better. In real estate investing, you want to know more information about a property – and quickly.
When you know details such as the estimated available equity, sales history, comparable sales registered encumbrances, and more, you can use this to start a conversation with the current owner.
This knowledge can help you find properties before they’re even on the market.
It can also help you know where to invest your efforts and help avoid problem deals that waste your time and money.
Consider accessing in-depth information like the GeoWarehouse Property Details Report, or the Demographics Report, to learn more about a property or neighbourhood you’re investigating.
- Look at sales, not listings.
Some indexes pull their data from real estate listings – meaning all properties that are on the market, regardless of whether they have sold or not. While this can tell you where properties are being listed for sale, it’s not enough information to be confident in an investment opportunity.
Anyone can list a property for sale, but what’s more important is that the property actually sells. For example, in the first half of 2018 in Calgary, CBC reported that only 44% of properties listed actually sold.
You can gather more concrete, usable information by looking at the final sales data for a property – how much it sold for, where it was listed, how long it was on the market for, etc.
The Province of Ontario Land Registration Information System (POLARIS) uses sales information in its data and products, including the Teranet-National Bank House Price Index.
- View the financial status of the property, such as registered mortgages.
You can gain an edge by learning more about a property’s financial status. This might include registered mortgages, liens, transfers, and more.
This can help you avoid a potentially bad deal, which will save you time and money. But you can also use it for your information.
For instance, if you’re looking at a property that isn’t listed, and find that there is a lien on it, you might be able to negotiate with the owner and lien registrant to take on the lien — which could be motivation for the owner to sell.
See registered encumbrances with a GeoWarehouse Parcel Register*.
- Look at the ownership history.
Who owns the property now? How many times has it sold in the past? And what were the sale values each time it changed hands?
Although today’s housing market may be different from the housing market of ten years ago, the sales history can still be a valuable way to assess the earning potential. You can use the sales history data to forecast the best scenario, worst scenario, and most likely.
As well, knowing how long the current owner has had the property for can help inform your approach.
If you’re considering a property with a relatively new owner, they may not have as much of an attachment to it, but they may not be ready to move on yet. Conversely, someone who has owned the property for a long time may not want to part ways – or they may be ready to consider downsizing.
Find out the sales history of the property you’re investigating with a GeoWarehouse Property Details Report.
Knowing more from the start can give you a competitive edge and help you make more informed decisions. It all starts with the tools you use.
Access our GeoWarehouse property tools for real estate investors and developers today. Call 1-866-237-5937 or visit www.geowarehouse.ca.
* An official product of the Ontario government pursuant to provincial land registration statutes.