What is the secret to unlocking amazing real estate profits, regardless of what market you are in, and what inventory is available?
All too often, real estate investors can be heard griping that they are in a tough market; that they don’t have the right inventory, prices are too high, there aren’t enough buyers, or the spreads aren’t where they want them. Yet, others seem to not only be doing fine, but are setting records. So what’s the deal? Is there a secret to success?
Souvenirs and Trophies
What one investor may not find attractive or valuable, is extremely appealing to another. The same can be said about lots, vacation destinations, and homes. Consider those little sand filled bottle souvenirs: they offer “your own piece of beach property,” from a given location. They have them in Florida, Texas, and California. In one sense, they are the cheapest way to own your own patch of land in these places. For a few dollars, you’ll always own a piece, without any holding costs, tenant headaches, or having to travel. Every time you look at it on your counter, you’ll be reminded of fond memories of your visit. Of course, if an owner of 20 or 100 acres of Texas desert bottled up the sand that blew onto their property and sold it for $20 a pop, they might make a killing. Over the years, some could bring in far more cash this way then marketing and selling the land once. In other places, we see homebuyers purchasing homes only fit for tearing down because they want the prestigious land that it sits on.
These trophies and souvenirs are all about the stories we tell ourselves. Things only have the value we place on them as individuals. For example, declaring a lot being at the heart of the next local real estate boom could add seven figures to its perceived value. Turn around and declare that the same property may be underwater due to global warming and rising sea levels within 58 months and no one might want to buy it.
6 Stories Consumers Tell Themselves
- A rock with a word written on it, on a store shelf is worth $5 to $15 dollars, even though thousands of them are right outside for free
- Putting a brand name on a piece of clothing or luggage can multiply its value by thousands of dollars
- Going to this vacation destination will make me cool and trendy
- Living in this neighborhood will get people to love and respect me, and increase the happiness I feel every day
- Refusing to use financing will guarantee I am never broke
- It doesn’t matter how much I borrow because it’s just all about cash flow, and things are different now. That cash flow will last forever
3 Ways to Put Storytelling into Play in Your Real Estate Business
1. Luxury Branding
Luxury brands sell for big bucks, due to perception. Sometimes it has little to do with the actual quality of a house and more with the story behind it. Real estate can borrow luxury branding and value with celebrity sponsors, including fashion labels in design, and through marketing language and imagery. How else do you think a home in a desert can sell for $1M? Or that the same size home in one area sells for $50M more somewhere else.
2. Solving What Keeps Them Up at Night
Safety, financial freedom, and providing for children are what keep tens of millions of Americans up every night. How can your real estate offerings solve this? Do you have advanced security systems installed when rehabbing properties? Is your city like El Paso, TX, which is rated one of the safest in the nation? Will the deals you offer slash living expenses and work load, and build a nest egg?
3. Ego
Ego often goes hand in hand with luxury branding, but it is more than that. People want to be seen as smart. They want people to look up to them as savvy and cool. Great real estate investments with high returns, getting ahead of the pack, and maintaining an edge over the completion all mean something.
