This article is an excerpt from the Shortform book guide to "The Book on Rental Property Investing" by Brandon Turner. Shortform has the world's best summaries and analyses of books you should be reading.
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How can you find investment properties? Will you have better luck finding them online or in person?
If you already know what type of property you’re interested in, it’s time to nail one down. There are several methods to do this, such as searching through eviction records or using an online database.
Discover how to find investment properties in five different ways.
Locating Possible Properties
In The Book on Rental Property Investing, Brandon Turner says you can use several methods to figure out how to find investment properties:
1. The Multiple Listing Service (MLS): a database with the most accurate survey of listings. In the MLS, smaller catalogs of regional listings combine to form a single national database. You likely need a real estate agent to access it—another reason to cultivate this relationship early.
(Shortform note: Canadian MLS services work similarly to the US-based ones Turner covers. They’re also run by a collaborative of real estate professionals, and brokerages stringently oversee the listing addition process to ensure accuracy. The largest single regional catalog is for the Greater Toronto Area: In 2015, the service boasted the participation of more than 50,000 local realtors. Canada, as a whole, has more than 80 boards of realtors managing MLS catalogs.)
2. Direct Mail Marketing: frequently sending out postcards or letters to property owners you think might sell. Some owner lists are accessible for a fee, or you can make your own. This cold-calling approach appeals mostly to struggling owners who want to sell quickly and hassle-free.
(Shortform note: It’s possible that sending physical marketing materials to prospective sellers is more effective than sending digital ones because they have a higher emotional impact on the receiver. This factor, added to the frequency Turner suggests, can enhance the chances that a prospective seller will identify with your brand and consult you first if they decide to unload a property. To add more to that emotional appeal, include attractive pictures on your materials.)
3. Driving around, hunting properties: a low-cost option that’s especially useful for finding options. Look out for signs of distress or neglect that often indicate no one resides in a property—the owner might be poised to sell.
(Shortform note: Some telltale signs of distress or neglect to look out for include no one putting garbage cans out on collection day; the home going undecorated during holiday seasons; electric meters having red out-of-service tags; damaged or boarded windows; and the lights never being on, especially at night. When scouting properties, make sure to consult local trespassing laws to make sure your activities are above-board.)
4. Evictions: Turner points out that landlords in the midst of evicting tenants are often going through stressful and legally complicated experiences. They may be more apt to sell quickly—and at a lower price—if you present them with a timely exit opportunity. Eviction records are generally available to the public.
(Shortform note: The late 2010s and early 2020s saw considerable spikes in eviction rates in the United States, leading to what many lawmakers consider an eviction crisis. Specifically, the country has seen annual eviction rates of nearly four million renters, and nearly six million renters not being up to date on their payments. Further, in 2018, roughly 6% of renters were threatened with eviction.)
5. Craigslist: a common online hub for locating sellers or advertising yourself. Turner emphasizes that the site is free and easy to navigate.
(Shortform note: Not everyone agrees with Turner that Craigslist and similar sites are worth the effort. Critics point to the fact that, even if you religiously create ads and respond to sellers’ posts, those other users may not respond quickly or at all. Also, because these sites are free and easy to use, they can be saturated with competition, making it difficult to drum up a stream of worthwhile leads.)
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Here's what you'll find in our full The Book on Rental Property Investing summary:
- An educational guide to locating, buying, and managing real estate property
- The major pitfalls new investors encounter and how to overcome them
- How to hunt down, select, finance, and purchase your first property
