A few months back, Zillow.com officially admitted what we could have told you years ago: You cannot run a real estate investment from behind a computer, and you need boots on the ground.
In November, Zillow officially shut down their home-flipping business, and it is estimated they took a $550million loss on the adventure. Now, if you’re like most of our clients, you can’t afford a $550 mistake- let alone a mistake in the hundreds of millions!
So what went wrong? In our opinion, it comes down to the lack of live field experts. Zillow is an amazing platform to advertise a vacancy or home for sale, but they were trying to use their collective data to come up with their estimates of home values. And unfortunately, it’s not always that easy. Even if a group of homes was built identically ten years ago, each one is going to be different. For one thing, some owners make updates, while others let the home wear down. So, while data is an important tool we use to price a home for sale or rent, that’s only one facet. You also need to have the experience to more accurately make comparisons of other homes in a given area, such as knowing which amenities to add or subtract.
The second part of this equation is the rehab work. Again, without qualified eyes in the field, looking at the home and making the necessary repairs, someone reading reports behind a desk may not catch a lot of deferred damages. This is why self-managing a rental from afar is almost impossible to do well. Sure, you can call a plumber to fix a leak once it's reported, but you need to have someone there to make sure the fix was done properly (rather than a “duct tape job”).
Therefore, if you're looking at buying investment property, the best way to do so is having a qualified REALTORⓇ on your side - one who works with investors! And, the best way to keep your investment profitable is with a qualified property management company - one with boots on the ground taking care of the maintenance and tenant acquisitions.
Are you looking to invest in real estate and want to make sure you are profitable? Let's talk about how we can help you find a great property and take care of the management! Give us a call at 224-601-5415 or email us info@ChicagoStyleManagement.com