Why American’s Call Real Estate “The most favored long-term investment”

A real estate investment is likely to appreciate over time.

A home’s market price should increase over time. As we know, home prices go in cycles, so a property’s value may not go up drastically in the short term. Still, if the owners live in their home long enough, there is a good chance they will sell it for a profit in the future. The Federal Reserve Bank of St. Louis found the average home selling price rose from $274,100 in 2009 to $382,700 in 2019, an appreciation of almost 40% over ten years. Not only is that an excellent return on an investment, it also gives the investor a place to live. It’s important to note a good part of a home’s appreciation is in the value of the land—as the old joke goes: “The three most important things in real estate are location, location, and location.”

A real estate investment builds equity.

Also increasing over time is the owners’ home equity, which begins with the down payment they made and continues to build as they pay down their mortgage principal every month and as their home’s market value grows. Americans love the fact that owning real estate lets them save money without thinking about it.

Profits made on a real estate investment could be tax-free.

Profits on investments—capital gains—are usually taxable. However, homeowners are allowed a tax-free profit on their main residence up to $250,000 for single homeowners, and up to $500,000 for married couples. Second homes are excluded and there are other requirements, so, as with all tax matters, please have clients check with a tax professional before they make any tax-related decisions.

Not Hiring an Agent. As you know, sellers occasionally believe that if they sell their home themselves, they will make more money by not paying a commission. Remind them they are assuming they will sell the home for the same price you would get. Share with them that one study found that homes listed by agents sold for an average price almost 28% higher than the average price of for-sale-by-owner (FSBO) homes—and the seller’s net profit after commission was 10%-30% higher than the FSBO’s profit. Home selling is not an easy job for the inexperienced; let them know that less than 10% of FSBOs ever reach closing!

Getting Emotional. A home is a place of wonderful memories, but home sellers need to keep their emotions in check. Once they decide to sell, they should think of themselves as business people. It is easier for people to distance themselves from the emotional aspects of a task by looking at it from a purely financial perspective. They can let their memories of how they first felt about the property motivate them to stage it to inspire buyers.

Listing at a “Testing the Waters” Price. You show home sellers the prices of recent comps and recommend a listing price, but then they ask you to list at a higher price, just to “test the waters.” You know they need to realize that the most important price is the one they first list, that overpriced homes rarely draw interest, and that later lowering the price invites buyers to offer even less. They need to understand that if they price at a good value in the market, it may invite multiple offers that send their selling price higher.

Expecting They’ll Get Asking Price. Some sellers need to be reminded they should always list at a price that leaves room for negotiation because if they do not have competing buyers, the one they get will want to negotiate. Make sure they are happy with a little less than their asking price.

Hiding Big Problems. Sellers sometimes forget that major problems will be revealed during the buyer’s inspection, and that it is important to fix such problems. Alternately, they could skip fixing them, and either price the home below market value, or price normally and offer the buyer a credit to fix it. Of course, if they avoid fixing things, they eliminate all the buyers who want a turnkey home.

Not Staging. Some sellers underestimate the importance of staging. If they are unable to hire a stager, they still need to make sure their home shows at its best—making small repairs to avoid buyer red flags, decluttering, removing furniture and personal items, painting, and overall cleaning up.

Spring-Clean Your Workspace

Clean out all the unnecessary papers that piled up in recent weeks, eliminating all nonessential daily items. It’s a good idea to do this at the end of every week, so you can start each Monday with a clean workspace. Then declutter your files, starting with your physical ones. A study found that 90% of the papers people file away are never looked at again! However, do file away all essential documents that are important to keep as records. Cleaning out the nonessential items makes room for new items you need to keep. Include your digital workspaces. Spring-clean your computer, smartphone, tablet, databases, and email and social media networks. Delete files from desktops and home screens, organize document files and folders, clear out email inboxes, unsubscribe from emails you no longer need. The whole point is to make sure you can easily get to the key files you access every day.

Spring-Clean Your Work Habits

This is a great time to make positive changes in your business habits. The simplest approach is to focus on turning one negative habit into a positive one. Perhaps it’s the habit of keeping a messy desk. Resolve to read, file, or discard every piece of paper that crosses your desk. Or you could resolve to stop procrastinating and start taking immediate action on your to-do list. Changing these habits will improve your productivity and performance, and make your business more efficient.

Spring-Clean Your Client List

This means organize it. Clients are the core of your business. It’s far easier and cheaper to get repeat business from existing clients than to find new ones. Clients are also great sources of referrals—and those referrals are already pre-disposed to give you their business. Consider segmenting your client database into categories to make it more efficient. Create client groups based on how much money they spend, how often they use you, or their potential for future revenue. This can help you market to each category more effectively.

Spring-Clean Your Goals

Finally, look at the last few months of business and see if that changes your vision of where you want to be at the end of the year. Focus your efforts on where you see the greatest reward and where the work is most satisfying. Think about all you have done to get to where you are and what mindset you will need to take you the rest of the way. That will also spring-clean your attitude!

Update your Google page. Log into your Google My Business account and update your Google business profile. Add new photos or utilize the “posts” section to promote your site content, new listings, or team members. Consistently updating your profile ups the chances you will be featured in the Google “three-pack”—the three businesses featured on the first page of the search results. Google loves it when you update your profile at least two or three times each month.

Power your website with helpful content. Use the blog feature of your site; it’s an extremely powerful SEO tool. But avoid putting great content only on your blog page. Create other pages focused on specific topics, such as neighborhood guides, school districts, new subdivisions, or attractions in the area so that Google sees that your content is diverse beyond just a blog.

Answer some “People also ask” questions. “People also ask” is the section on the first page of Google search results that features questions people are asking around your search topic. Search real estate in your area and see what questions Google lists in the “People also ask” section. Pick one and write blog posts answering that specific question. Then promote that post on social media and in your email newsletters to build authority for the blog page. Keep going back to the “People also ask” section that had the question you answered to see if your website gets featured.

Create videos. Ever notice how videos often land on the first page of search results? That’s another opportunity for you to wind up at the top of search results. Start making videos about topics you know people looking to sell or buy in your market are searching for. Write titles that use your target keywords. Always use YouTube, which Google owns and therefore prioritizes those videos over ones on other video-sharing sites.

Get more reviews. These are a big factor when Google decides where to place you in search results. Add links to your Google page’s review section on the footer of your website, on your newsletters, social media pages, email signature, and anywhere else you can come up with. When you close on a home, ask happy clients if they would share their thoughts in a review. If they’ve reviewed you somewhere else, email them that review with a link to your Google page, and kindly ask them to simply copy and paste it.

Build links back to your website. This has been a basic SEO practice for a long time because Google looks at how many websites point back to yours when it ranks search results. Contact local newspapers, magazines and other local publications, local news stations, and your chamber of commerce. Offer to give them articles about topics such as what new residents should know about your area, or who’s moving there. If they use your article on their site, make sure they include a link back to yours.

Be an active forum user. Popular question-and-answer websites such as Quora and Reddit can establish you as a local expert in your area and build your credibility to Google. Go to these sites and look for topics and pages relating to your area. Follow the discussions and offer your insights and advice. If you mention market stats or housing prices, you can add a link back to your website, but only add them where it is legitimately appropriate. Blatant self-promotion will not be tolerated in online communities.

Use Pinterest for businesses. People use Pinterest to scope out new areas and trip destinations to help them get a sense of the place. With many folks thinking about relocating, Pinterest has become a useful platform for real estate agents. Pins can feature your blog posts about moving to the area, neighborhoods, lists of things to do—any resource. Post to your Pinterest business account and include links back to your website. Many find Canva, a free graphic design website, quickly helps them create beautiful pins and graphics.