8 Ways To Yield Maximum Return When Selling Property Overseas
One key to success when diversifying your investment portfolio to include property overseas has nothing to do with purchasing property overseas.
It has to do with your exit.
Here are eight strategies and tips for selling for maximum return when the time comes.
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
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It’s tough to change a would-be buyer’s first impression, so make it as good as it can be. Do everything you can to make the property as inviting as possible. It can even be worthwhile investing in painting common areas, for example, so the approach to your unit is 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).
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.
In U.S. property markets, multiple listing services and other property selling services like Zillow Z show both the Days On Market (DOM) and the Cumulative Days on Market (CDOM), counting all the listed days since the last sale, even if the property came off the market for a while.
This works against you, as the seller. As the DOM and CDOM tick by, potential buyers begin to worry that something could be wrong with the property. As a result, it’s smart not to list a property any earlier than absolutely necessary.
However, overseas, it’s not possible for a buyer to know, in most cases, exactly how long any given property has been on the market. No DOM clock is ticking in the background, eating away at your price, meaning patience is your friend.
Resale Tip #4: Invest In Professional Photography
Potential buyers will come to view the property (or not) based on how it looks on the internet. It can be worth investing in professional photos, and, in markets in Latin America, the Caribbean, and Asia, the cost can be nominal.
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 or 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. This can be especially important if your real estate agent doesn’t speak English as a first language, leading to an awkward property description.
Resale Tip #7: Pay Attention To Your Competition
Years ago when selling an apartment in Buenos Aires, I noticed that other apartments in the same neighborhood were overpriced and weren’t selling. I raised my price by $35,000. My apartment was still the cheapest listing in the zone at the time and sold in a matter of days.
Resale Tip #8: Target The Expat Market
The best way to realize a premium when reselling in any market overseas can be 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 this way, with an English-speaking agent who markets exclusively to North Americans, will 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.