SOURCE: ERA Real Estate

ERA Real Estate

August 18, 2011 06:00 ET

Market Conditions Creating Opportunities for Real Estate Investors

Survey From ERA Real Estate Reveals Strategies for First-Time Investors

PARSIPPANY, NJ--(Marketwire - Aug 18, 2011) - The rising ranks of renters combined with a considerable inventory of foreclosures and historically low mortgage rates is creating a market ripe with opportunities for residential real estate investors. Indeed, according to a recent survey conducted among its network of real estate professionals by ERA Real Estate, an innovative franchising leader in the residential real estate industry, 95 percent of respondents said that they believed now is a good time for first-time investors in their local markets.

A majority of ERA survey respondents (57 percent) said they were actively courting first-time investors, and 51 percent are seeing an increase in first-time investor activity in their markets. Among respondents who do not own rental properties, 81 percent said that recent market conditions led them to recommend investing in real estate to their friends and family.

"Now is a great time to invest in real estate but it's critical that people new to the game watch out for common pitfalls," said Charlie Young, president and CEO of ERA Real Estate. "Buyers should select a real estate professional with the ability to identify potential investment opportunities in their community who is also well-versed in the drivers of the local rental market."

Obtaining financing (42 percent) is atop the list of typical challenges faced by potential first-time investors in the market. Other challenges include creating a long-term business plan for the property (21 percent), pulling the trigger on the purchase of an investment property (18 percent) and lack of market intelligence (17 percent).

Other key ERA survey findings relevant to first-time investors include:

  • Submitting an unrealistically low offer is the most common mistake made by people buying their first investment real estate property.
  • Another common misstep is neglecting to calculate maintenance expenses vs. rental income.
  • Buyers also should focus less on price and more on factors of importance to renters such as proximity to retail locations, service providers and health care as well as access to public transportation and adequate parking.

Conversely, sellers looking to attract investment buyers should consider the following:

  • Focus on providing detailed profit and loss cash flow analysis statements for the property. This will help a buyer clearly identify the investment potential of a listing.
  • Highlight the proximity of the property to rental populations such as military families or college students.
  • Unlike traditional home buying, playing up curb appeal, staging and hosting open houses are the least important factors when marketing a home to investor buyers.

According to the National Association of Realtors, investors accounted for 19 percent of the homes sold during May and June 2011, up from 13 percent in June 2010.

The complete ERA Real Estate first-time investor survey results are available on the ERA website at the following link: http://smartercommunity.info/press/1st-time-investor/

Methodology: ERA Real Estate conducted an online survey of its real estate professionals across the United States about first-time residential real estate investors in their markets. The survey was fielded between July 5, 2011 and July 25, 2011, and the results are based on responses from 358 individual brokers and sales associates.

About ERA Real Estate
ERA Real Estate is an innovative franchising leader in the residential real estate industry with nearly 40 years experience in developing consumer-oriented products and services. The ERA® network includes approximately 30,000 brokers and sales associates and approximately 2,500 offices throughout the United States and 38 countries and territories. Each office is independently owned and operated. ERA Real Estate is a subsidiary of Realogy Corporation, a global provider of real estate and relocation services. ERA Real Estate information is available at: ERA.com.

Contact Information

  • Media Contact:
    Melissa Campbell
    ERA Real Estate
    973-407-7904
    Email Contact