When Lief and I sat down to map out the plan for our new book “How To Buy Real Estate Overseas For Cash Flow (And A Better Life),” we realized that we’ve largely ignored—in these dispatches and in previous books on the topic—one of the keys to success when diversifying into property overseas…
Namely, we haven’t historically focused enough on how to sell for top dollar.
We decided to add a section to our book, therefore, sharing strategies and tips for selling, when the time comes, for maximum return.
Here’s a sneak peek inside that chapter—the eight most important things we’ve learned—after three decades of experience and more than 100 buying and selling experiences around the world—about making property profits overseas:
Resale Tip #1: Don’t Buy Common
As the adage goes, in real estate, the money is made in the buy, not the sell. This is true everywhere in the world, and the best way to get top dollar at resale is to avoid common. Choose property with inherent value and premium qualities. This can be about the location, the neighborhood, the building, the development, or the individual asset.
Location is immutable, so be confident in that choice. Other factors are more controllable.
Resale Tip #2: Remember The Importance Of Curb Appeal
Years ago, we looked at a house for sale in Panama City. It was in a prime neighborhood, one of the city’s best addresses, and the list price reflected that. The owners were so sure they’d be able to sell for top dollar that they made zero effort in advance of listing the property.
It was nearly impossible even to walk through the house. The windows were covered by dark, heavy drapes, and every room was cluttered with junk. You couldn’t judge the size of the rooms or get any perspective on the place overall.
We moved on quickly and noted that the house remained on the market after the family had moved out and into a new house in a new Panama City suburb. That happens a lot with high-end properties in Latin America. Wealthy families don’t need to sell so they hold on for top dollar, believing their properties are worth more than they really are, often simply because of where they’re located.
The rooms of your rental property overseas probably won’t be dark and cluttered, but you should do what you can to make the place inviting. It’s tough to change a would-be buyer’s first impression, so make it as good as it can be. We’ve even paid to paint common areas so the approach to our unit was as appealing as possible.
Definitely paint your own interior walls if they need it. Make sure the appliances work, especially, in a market in the tropics, the air conditioners (most apartments in Latin America have split-unit air conditioners rather than central air).
Even think about upgrading your front door. A heavy, high-quality door can go a long way toward a great first impression, while a screen or hollow, lightweight doors screams cheap.
A potential buyer will favor a property he can list for rental the day he closes without having to do any work. If he perceives the place as rundown, he’ll expect a bargain price. Make your property picture perfect, and you can ask top dollar.
Resale Tip #3: Be Patient
Unless you’re selling into a frenzied market, patience is another requirement for getting top dollar, especially with a high-end property. Getting your price for a premium property means waiting for the right buyer to come along.
We spend part of each year in Paris, where one of our favorite pastimes is reading the listings in real estate agency windows. Often, the properties highlighted this way are priced higher on a per-square-meter basis than other similar properties in the same neighborhood.
This is usually because properties that make it into the agency windows are special in some way. The bargain and more common properties are sold quickly. Those in the windows take longer to sell. If you can be patient to wait for the right buyer to come along, the payoff is worth it.
Resale Tip #4: Invest In Professional Photography
People will come to see the property (or not) based on how it looks on the internet.
Resale Tip #5: Pick Your Season
Every market has a season that’s better for listing and selling than the rest of the year. In some markets, listing in summer versus winter, the dry season rather the wet can make a dramatic difference in the sales price you’re able to realize.
Resale Tip #6: Write Your Own Listing
If you have any writing experience or skills, consider drafting copy for the real estate listing yourself. No agent knows your property’s selling points as well as you do.
Resale Tip #7: Pay Attention To Your Competition
When selling one of our apartments in Buenos Aires, we noticed that other apartments in the same neighborhood were overpriced, and they weren’t selling. We raised our price by $35,000 and were still the cheapest listing in our zone at the time. Our place sold in a matter of days.
Resale Tip #8: Target The Expat Market
The best way to realize a premium when reselling is to sell to another foreigner.
In many markets overseas, including Playa del Carmen in Mexico and most towns along the cost of Spain, for example, the buying pool is primarily expats.
In a market like Medellín, Colombia, however, with more local than foreign demand, you should do everything you can to connect with potential foreign buyers. You’ll almost always be able to charge more than if selling on the local market.
Decorate your property to be attractive to a North American and promote the property online in English and through an English-speaking real estate agent.
Listing with an English-speaking agent who markets exclusively to North Americans is like advertising your property in the window of a Paris agency. It’ll attract buyers looking for a simple, turnkey purchase and willing to pay more not to have to do any work.
The best buyer is one who doesn’t have or who isn’t willing to take the time to hunt for a bargain. That’s almost always a foreign buyer.
Sincerely,
Kathleen Peddicord
Founding Publisher,Overseas Opportunity Letter
