In this market, sometimes things can seem helpless and pointless. Do not let that be your mindset when you are on the home search. The important thing when looking at properties is too see past what others are not paying attention to. Most of the time this happens when a property has been on the market for a longer period of time. In this market, a long time for buyers in anything over two weeks.
Most buyers think if a property has been on longer than two weeks, then immediately there is something wrong with the property. That is not always the case, and requires further research by the buyer, but more from the buyer’s agent.
You have to take a step back and see why this property has not moved, and see if there is a play there. Right now, if you look in Salem there are 4, 3 family properties that have been on the market for more than 25 days, 6 Saint Paul Street, 73 School Street, 74 Lawrence Street, and 14 Wheatland Street.
Each property has there own positive and negative attributes. If you have been trying to get into the investment game for months with no luck, these should be your targets. Some may need more work than others; location may be better at one property or the next. As the buyer, you have to explore those +/- and see which property would best suit you as the buyer.
For example, 73 School Street in Salem , asking price $769,900. It is a nice location, a large multi-family with 3 beds in each unit. The rent roll currently is $5,796 per month, with the average 3-bedroom rental in Salem over the last 6 months being $2,218. The current rents cover your monthly expenses immediately if you are an investor, also leaving room for growth depending on the work you may put into the units.
If you are going to be an owner occupant, this allows you to put in an offer with the request to deliver a unit vacant. In a competitive market, if you ask a seller to deliver a unit vacant, it immediately weakens your offer, as that process can take 30-60+ days to make happen. Now, with this property sitting for 25+ days, the seller would be more willing to accept your terms and make that deal work.
If you look at 74 Lawrence Street, asking price $599,900. Decent location, near the University. Also provides 3 beds per unit, but the current rents here only pull in $4,075 per month. With this price point being significantly less than School Street, it provides options. It frees up more capital early and could speed up renovations, which allow for the rents to be significantly increased and improve your return.
There are different strategies you can take, whether attacking the price or certain terms in properties that have been sitting for a while. If you have been in the buyers seat for a while with no luck breaking into the market, these are the opportunities you have to explore and take advantage of.