We all know how overwhelming it can be for home buyers to sort through all those real estate listings floating around in the housing market just to find the right one. The frustrating part is when you find the ideal house after months of searching, only to find out it’s not what was promised in the ad. Sellers often use misleading words that have double meanings to make an unappealing home sound enticing to try and win over potential property buyers. If you’re a real estate investor who’s buying a property to rent out, you must be aware of such language.
When buying an investment property, investors have to interpret every word used by the seller. After all, you’re buying a property to make money, so you want to make sure you’re buying the best one. If you fall for misleading words, you’ll most likely end up with an undesirable rental property that will cost you more than it profits you. To help you save time and money when buying a property, we’ve listed some of the most common misleading words in real estate and the true meaning behind them.
Related: Buying an Investment Property for the First Time? Here Are Your 4 Most Important Considerations
“Quaint, Cozy, and Charming”
These three words are often paired together. If you see them in a real estate advertisement where the size of the property is not specified, you can expect the property to be small – very small. The bedroom would feel like a closet, the closet itself probably wouldn’t fit anything, and there’ll barely be room to move in the kitchen. In addition, while cozy usually refers to something comfortable, if found in real estate listings, it usually means “worn out.”
Some also use “quaint” to describe the neighborhood, where it translates into quiet. The issue here is that a quiet neighborhood could actually be an isolated area. Thus, a real estate investor should take caution when reading that the property is located in a “quaint neighborhood” as it could mean that the property is actually in the middle of nowhere. Your goal of buying a property as an investment is to make rental income. But how can you expect to achieve your goal if you can’t find a tenant to pay rent in the first place?
Our advice to real estate investors is to perform a neighborhood analysis before buying a property. There are websites, like AreaVibes, which shows you how desirable or livable a certain neighborhood is to home buyers. You can also use Mashvisor’s real estate analytics to analyze how profitable investment properties are in the neighborhood. For more, read “How to Do a Neighborhood Analysis in Real Estate.”
On the opposite side, the word open-plan is another common use of misleading language when advertising small properties to make them look luxury or high-end. For example, if a real estate listing describes a studio-type property as open-plan, home buyers can expect to find the kitchen, living room, and bedroom all squashed into one room.
“With Potential” or “Original Condition”
If you come across these words in an ad for an investment property, you should expect to put a lot of work into the property before you can rent it out and gain rental income. There are so many other misleading words used to describe such a property from “sold as is”, to “blank canvas”, to “a renovator’s dream.” If you’re not looking to buy a property and flip it for a profit, beware of real estate listings describing properties using such misleading words.
Usually, these properties are priced cheaper, which is why some home buyers fall for them. However, property investors are always advised to not put the price tag first. Sellers are even likely to price the home cheap due to the fact that it needs repairing. Property investors thinking of buying a property to rent out will need to paint the house, work on the flooring, and do other major repairs on the house before they can actually list it for rent and start to make money in real estate.
Therefore, you’ll need to bring a home inspector in before buying a property. This way you can rest assured that you won’t spend more money on your investment than what your budget allows. Did you know that we offer real estate investors with a Property Finder? This investment tool allows you to find the best properties for sale that match your criteria (location, budget, property type, rental strategy, and number of bedrooms and bathrooms).
Do you have a free Mashvisor account? Click here to use our Property Finder and find properties in a matter of minutes!
“Practical” or “Has Great Character”
Rental properties described as “practical” really mean that they are functional, but they are not in good condition. This misleading language is popular among sellers who are having trouble selling and are trying to get rid of the property. Another misleading language paired with practical is “state of the art fittings” which is basically just a fancy way of saying functional. These terms are also often used to describe a property that needs some level of renovation before it becomes suitable to rent out.
On the other hand, sellers mostly use “great character” to convince you that there is something unique about the house. However, real estate investors buying a property “with great character” or that’s “mysterious” often end up disappointed with what they see. This misleading language could simply mean a well in the basement or a secret doorway leading to an unknown part of the house.
Is this really what you’re looking for when buying an investment property? We don’t think so. A real estate investor aims to find a profitable property. To find such properties, you’ll need the help of a Rental Property Calculator. This is the ultimate investment tool to estimate the potential return on investment of a certain property for sale. Where can you find one? Right here at Mashvisor.
Related: Buying Rental Property Calculator: The First Thing to Do in Real Estate Investing
“Within Walking Distance to the City”
The location of the investment property is obviously a big concern for a real estate investor. Rental properties that are located near the city often perform better. This is because they have high demand and, thus, investors can charge higher rents which results in better rental income and positive cash flow. So, buying a property within walking distance to the city is great.
But why should you beware of real estate listings which describe a property for sale as that? Simply because distance could be translated differently. For example, a property that someone considers “within walking distance” might be miles away for you or in the middle of nowhere for someone else. The smart thing for real estate investors to do is ask their agents to specify the exact distance and features of the location before committing to buying a property for real estate investing.
Related: Location Location Location: What Makes for the Best Place to Invest in Real Estate?
To prepare yourself even better for buying a property, see what advice these 25 realtors share with first-time homebuyers.
The Bottom Line
Buying a property is known to be a great investment strategy to make money in real estate, but not just any property works. Property buyers need to assure that a property for sale is in a desirable location and has a potential to generate profits. Therefore, you should beware of misleading language that sellers use in their real estate listings in an effort to shape the property to fit with your requirements. To avoid falling for these misleading words, list the attributes you want in your future investment property and tick each one off before making the purchase.
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