Clients Ask: How Do I Find Overlooked Real Estate Opportunities in a Hot Market?
This week, a client asked about finding overlooked real estate opportunities amidst rising property prices and interest rates.
Q: I’ve spent 4 months looking for good real estate investment in Montreal, but so far I haven’t been able to find an interesting opportunity within my budget ($250 for a condo or $500,000 for a duplex). Have I been priced out? How do I find overlooked real estate opportunities in a hot seller’s market?
A: Buyers and investors home-hunting in a competitive seller’s market may need to think outside the box when it comes to their property search. Finding the perfect deal will take longer than usual, but following the right steps will eventually lead you to a successful investment.
Here is the step-by-step roadmap we use to help our clients find affordable real estate deals in Montreal:
1 . Get pre-approved! If you require a mortgage for your purchase, be sure to have a pre-approval in hand before visiting properties. There’s no time to waste in a hot market – the first investor to put in a pre-approved offer will snag the hot deal.
2 . Set up a property alert for real estate opportunities under your budget. An automated alert will inform you immediately when new deals meeting your criteria are listed for sale.
3. Look for repossessions in your preferred neighbourhood. Repossessed homes tend to be listed below market value since they are being sold by the bank, rather than the seller. Note: indicate that you are looking for repossessed properties in the “Additional Criteria” section.
4. Subscribe to an investor’s mailing list. Our Deal of the Week newsletter sends out the single best deal listed on Centris each week, handpicked by market analysts.
5. Join an investor’s group on Facebook. Facebook groups are a great way to share information and obtain resources related to investing.
6. Broaden your location search. Not all deals are on Montreal Island. Have you considered inner suburbs, or outer suburbs within an hour from Montreal? Rather than investing into a fully developed area, look into more affordable neighbourhoods with developing commercial avenues (Ville Émard, Rosemont, Pointe St Charles, HOMA) or suburban neighbourhoods with easy highway access and affordable revenue properties.
7. Look off-market. Many investors deal exclusively with pocket listings – properties which are not publicly listed for sale on the real estate database. You can find pocket listings by signing up to an off-market database, or by asking your broker to pull expired listings and contact the sellers directly.
8. Browse Investment Opportunity lists. Some real estate agencies offer curated lists of investment opportunities, which are updated on a month to month basis.
9. Make use of online market research and financial tools for investors. When shopping for a real estate investment in a hot market, you will need to make quick and efficient decisions regarding the profitability of a newly listed property. ROI calculators are a great way of making preliminary financial projections, and market reports are great for finding local averages and estimating risk on each opportunity.
- Investor’s ROI worksheet and calculator. (Estimate your returns on investment for any rental property).
- Home price evaluation.
- Average appreciation rates per Montreal borough.
- Average CAP rates in Montreal
- Montreal real estate market news
10. Make use of a licensed real estate broker. Working with a broker is free for buyers (commissions are paid by the seller and not the buyer), so it makes sense to benefit from their market knowledge and experience. Most brokers have access to a private network of sellers and other investors, where they will be able to source hot opportunities that are not listed on Centris. More importantly, a good broker will help you avoid risk and negotiate for you in case of a bidding war.