April 27, 2020

find potential investment property

When you are searching for a rental property to buy, there is plenty of legwork to do before you can send out any purchase offers. The good news is that you can do most of this work online – searching listing services and using rental and mortgage calculators to help you determine your offer price and possible rental rate. 

Which online services are the best to use to find a potential investment property? 

When you're searching for an investment property, you have many online platforms to consider. Some allow you to search across the country and apply filters to narrow your search to a specific area, while others will specialize in a region. There are also services geared more toward commercial real estate investors and brokers. These services provide information that assumes a user's familiarity with cap rates and the difference between a property's tax assessed value and market value. 

Here are a few readily available online options and basic guidance about how you can use them to find an investment property. 

Start Local

Your County Court System

Your county courthouse offers a treasure trove of real estate information. You'll find a public database that identifies properties scheduled for sheriff's sale or foreclosure auction, plus properties in probate or the process of foreclosure.

To find the court system for the area you're interested in, start with a state search and narrow it down to a district or circuit court. 

You’ll want to spend some time learning the site's navigation system, so you'll be able to enter the right type of case to get useful information. Most systems have a "Help" function, although some are more user-friendly than others. This will help you learn the specific names for case types – such as foreclosures – to speed your property search.

Newspaper Listings

You can find your local newspaper's property listings online, although you may have to pay for a subscription or premium access. Your subscription will allow you unlimited searches for property listings.

Local Listing Services

Craigslist is the granddaddy of the online public listing services and thus enjoys a broad user base in most areas. For real estate listings, you'll always want to verify any information you find. Since craigslist doesn't monitor for accuracy, property listings might feature exaggerated descriptions or use non-standard language. If a property looks promising, you'll want to check the information against what's included in a verified listing service or court record.

In some parts of the country, there are local versions of Craigslist. If you live in an area with a thriving local version, check it out – rental property owners often rely on this kind of local listing service to find tenants, and these owners could turn out to be sellers to an investor like you.

National Sources 

Realtor.com is the largest source for real estate listing information, and the most widely used. It’s a national database maintained by the National Association of Realtors. This online platform has information for every property currently listed with a realtor anywhere in the United States. In addition to its helpful property value calculator function, the service allows you to set up listing carts for properties that fit your criteria and emails the listings to you daily.

You can narrow down any search results by the type of property, price range, and location. Also, realtor.com provides recommendations to other services like mortgage companies and contractors in the area.

Similar sites like zillow.com and trulia.com piggyback off realtor.com. Realtors pay to run ads, so when you search a local property, Zillow and Trulia will recommend a realtor to contact. You'll also find extra information like school ratings and walkability scores. 

Loopnet.com is the leading national listing service for commercial property. This is where commercial brokerages list their properties for sale and lease. loopnet.com will provide property comparisons, the price per square foot, and other criteria, with many features available only with a paid subscription. 

Keep in mind that when you use any of these websites, you are looking at the pool of properties already listed by a real estate agent, and you'll see the "retail" price of the property or lease. Most investors know that asking market price or "retail" price is often based on emotions and not the actual value of the property. If you are searching for deals, you might not want to pay retail. 

Finding Deals 

Auction.com is the prime source for information about any property up for sale by auction. Types of properties include short sales, foreclosures, REOs, luxury real estate, commercial real estate, new construction, and land. These auctions take place in courthouses, online, or in-person. Especially when considering a property at auction, do your research! 

Figure out your comparable and get a good understanding of any necessary additional investment to restore or upgrade the property so it will be competitive in the rental market. With this information, determine your top offer and stick to it. It can be very tempting – either at a live auction or online – to get drawn into a bidding war, which will rarely turn out in your favor. 

Forclosure.com is a database of foreclosure property. You will find foreclosure listings from bank-owned homes, government foreclosures (HUD, Fannie Mae, Freddie Mac, USDA, etc.) real estate-owned (REO) preforeclosure listings, and foreclosure auctions on this site. This website adds new listings twice a day. You can sign up to receive emails about properties that fit your criteria. 

Realtytrac.com consolidates listings from both  auction.com  and foreclosures.com and specializes in foreclosure listings. If you are willing to look nationwide for a foreclosure deal, realtytrac.com enables you to search comparable listings then after you've set filters for location and type of property. According to the website, it is an excellent place to find a vacant property – often a good signal for a motivated seller. 

Determine Value

With every listing website, you need to do your due diligence to protect yourself from scams, unreasonable purchase prices, and making an unnecessarily high offer. As an investor, you make money when you buy a rental property at the right price – an amount you can finance comfortably – and rent consistently at a profitable lease rate, so you want to do your homework. 

An online valuation tool like rentometer.com preps you to do just that. Rentometer will help you determine competitive rental rates for any property nationwide. Enter the address, number of bedrooms, and select a search radius to get a good base number for asking rent in that area. 

No matter what your circumstance, whether you want to leave home or not, these easy-to-use online tools can make your search for an investment property both effective and efficient. Visit rentometer.com to see how it can help you evaluate rental property listings. 

This article was written by the Rentometer Content Team. The Rentometer Blog features fresh takes and insights on rental housing topics, services, and technology. If you liked this article, subscribe to Rentometer's email newsletter to stay up-to-date on the latest trends in rental housing.