A decrepit, rotting porch, and a caving roof that looks like it will collapse the moment you open the door are the universal signs of a vacant home. But this image is misleading, and it causes many investors to drive by the most profitable opportunities of their careers without a second thought. What you may not know is that when it comes to finding vacant homes, the best opportunities are hiding in plain sight.
So to save you from being one of the investors who regularly misses career-defining opportunities, we’ve compiled a list of the top strategies for building vacant property lists. You’ll learn that the houses you think will make great investments aren’t always the ones you should be spending your time on, and we’ll show you where to focus your attention instead. So without further ado, here are three strategies you must add to your toolbox.
Stay away from severely neglected houses
Many investors look for vacant homes by driving for dollars and door knocking until they find something that looks like no one lives in it. Then they buy it and spend a lot of money rehabbing it only to get minimal returns for one simple reason: no one wanted to live in the house in the first place. That’s why it’s vacant.
There’s certainly merit to rehabbing or fixing and flipping a property; you can even make money on houses that are on the verge of being condemned. But the most profitable opportunities are the ones that you don’t have to invest much time or money into before they start generating revenue.
This doesn’t mean that you should look past distressed properties, but it does mean that you should know what you’re looking for before you start generating leads. Otherwise, you’ll jump at everything you find. Unless you specifically want a project house, you should find vacant properties that are as close to move-in ready as possible.
The best way to find these properties is to use a real estate lead generation platform that lets you search for homes that sit vacant in your target market. For example, in the picture below, BatchLeads Property Search shows that there are 7,995 vacant properties in Phoenix, Arizona. With this information, you already have a large list of potentially motivated sellers who you can start calling immediately.
Of course, this list will only get you started if you’re trying to build a strong vacant house list. But you can focus it by filtering properties based on a number of factors like year built, lot size, square footage, features, and more. You can also filter for properties that are considered “mailing vacant,” meaning no one is collecting mail. This is often (but not always) a sign that a house is liveable but no one lives there.
Of course, visiting a property in person is the only way to know what it’s really like, but there’s another strategy you can use to save time and quickly shortlist available properties: virtual driving for dollars.
Visit properties virtually
Before modern real estate technology, the only way to see if a property fit your investing strategy was to visit it in person. But now you can leverage BatchLeads’ map and street views to get a look at the properties you’re interested in without leaving your home or office. Finding out if they’re worth visiting is easy.
The screenshot below shows a house pulled from the initial vacant property search featured above. Of course, this method won’t give you a real-time view of the property, but it will give you an idea of what condition the property is in, which will speed up your search and help you focus on the best opportunities.
Build a vacant property list in vacation hotspots
By far the best way to find vacant properties that don’t need a lot of rehabbing is to look in vacation hotspots. Properties in these locations are often held as short-term rentals, making them very profitable, as long as they have a steady flow of renters. But if the property owners struggle to attact short-term tenants, they’ll quickly be labled as vacant property.
Normally, this wouldn’t be an issue, since the post office typically labels a property vacant if mail hasn’t been picked up within a short time frame: 30 to 60 days. But for a vacation rental property in an expensive market with high taxes, a property that’s sitting vacant can quickly become a problem.
As a real estate investor, this means you can identify and connect with vacant property owners as soon as the lack of cash flow starts motivating them to sell. Then you can approach them with an offer that quickly and conveniently solves their problem in exchange for a below-market price on the property.
This isn’t always effective when the owner of a vacant property has only had it for a short period of time, but when you approach a long-time vacation rental owner, your offer may be exactly what they’ve been looking for. Their property has likely appreciated significantly since the initial purchase, and being a vacation rental landlord for years can become more trouble than it’s worth. By using a real estate lead generation platform, you can identify crucial information like ownership length that will make it easy to build a vacant property list based on these owners.
When you think about building a vacant property list, the thought is rarely glamorous. You may wonder if it’s really worth investing in vacant properties if you have to sift through trash, overgrown lawns, and severely neglected houses. But the good news is that vacant house deals are rarely gross or neglected. Often, they’re just owned by a landlord who’s struggling to find tenants or by someone who’s too busy to stop by.
The beauty of real estate investing is that there are endless unique opportunities available as long as you’re willing to dig and look past a property’s obvious characteristics. If you leverage real estate software, you can find tenant-ready vacant houses nearly anywhere. So whether you’re wholesaling, flipping, or growing your portfolio, don’t overlook the houses that are in good condition. They may hold more potential than you can imagine.