Dave told me that when he set about exploring small business ideas for veterans, he never suspected that his passion for real estate would stand out as a top option. As a seasoned real estate investor and a veteran myself, I wasn’t surprised. Transitioning from military life into that of an entrepreneur, where I would have control of my schedule and over my earning potential, gave me the freedom I’d been yearning for. I knew Dave felt the same.
But, as our talk went on, I was surprised to hear Dave give several reasons for why he hesitated to get started. He’s always been a man of action. Then again, he lives where there is a short warm season and where the real estate market is being reported as going flat. Together, these issues were undermining his confidence that now was the time to start buying, rehabbing, and reselling homes.
Of course, I reminded him that just because some factors, like the weather and market conditions, are outside of your control doesn’t mean that achieving your real estate investing goals is necessarily out of reach. And, in this business, there is so much that is in your control. So, good investment choices are still possible—even during seemingly less-than-ideal times. I could almost see his ears perk up as I continued.
When is the Best Time to Buy Investment Property?
In all fairness to Dave, a lot of real estate investors believe that deciding whether you should buy investment property or not hinges on factors like the time of year or whether local median list prices are trending up. Some of these beliefs have been long-held and, if there weren’t a kernel of truth to them, it’s not likely they would have persisted. But, a bit of truth doesn’t validate a point of view—or a course of action. So, let’s take a closer look at each of these beliefs to determine how accurate they really are.
Buy based on season.
It’s common practice to ensure you buy and renovate homes in time for high-buying seasons, like spring and summer, to guarantee that you can also sell your investment property quickly and at a good price. If you tend to invest in the midwest or the northeast, you might especially be nodding your head in agreement. After all, buying a property in the fall to just end up holding it through a long winter can inflate your costs. And, increased costs usually equal decreased returns.
But, leveraging seasonal cycles to guarantee you can sell your investment property fast and at top dollar does not mean you should hold out on buying a good deal. Distressed homeowners struggle to pay their mortgages all year long and, for some, there’s no better time to sell than as the holidays draw near or as the year comes to a close. And, though a rehab could get delayed due to rain, sleet, or snow, you can calculate for this possibility when accounting for your costs to buy. If you buy low enough, your returns will still be there when the weather warms up. But, pass on a deal and it’s likely gone forever.
Buy based on local market conditions.
How your local market is fairing and, in particular, whether it’s a buyer’s or seller’s market often holds sway, too. If median home sales prices are dropping due to a glut of inventory or a spike in interest rates, the area will likely be labeled a buyer’s market. Conversely, if sales prices are trending up due to rising demand and falling inventory, the same area may be called a seller’s market. Both conditions can impact when current homeowners are willing to sell and for how much. They may also influence whether or not would-be home shoppers are in the market to buy. And, because your goal as an investor is to buy low and sell high, their decisions have the potential to influence yours.
Keep in mind, however, that homeowners who need to sell fast don’t care how the market is doing. They care about whether or not their circumstances can be improved. So, rather than focus on factors that may influence homes being bought and sold on the open market, focus your efforts on how to find off-market properties. Your chances of buying low will be better and so will the probability that you’ll see good returns when you sell—no matter what market you’re technically in.
Buy based on the national market.
It’s not uncommon to be swayed by how the real estate market is performing, or is predicted to perform, on a national scale. When rising home prices in major markets are starting to outpace their value, rumors can circulate and cause reticence to sink in. Talks of market instability, an impending bubble, or just diminishing returns begin to rule the day. However, when the market is on the upswing, but still fairly within reach, talk turns to the revitalization of bad neighborhoods, the strengthening of the nation’s economy, and the turning of good profits. And, it’s always tempting to buy when things are reportedly going well and to balk at the idea when the media says they’re not.
Except that, even amid the real estate market’s normal ups and downs, one of the benefits of investing in real estate is its relative stability compared to other investments. Housing crashes are rare events. Falling stock prices, on the other hand, can happen on a regular basis. That’s why buying and rehabbing homes to sell based on market analysis or media hype, instead of on your own numbers, only sets you up to lose. So, make your decisions according to the real estate investment analysis and valuation you’ve performed on the property in question. Do that and I predict your returns will be just fine.
I understand why you might believe that the seasons, as well as local and national market conditions, determine the best time to buy, but I disagree with the weight these beliefs are often given. Yes, it’s important to consider your project’s total timeline so that, when it’s time to sell, it goes off without a hitch. Yes, it’s critical to keep your finger on the pulse of what’s happening in your local and national markets so that you don’t miss out on what’s trending. But, the best time to buy a property is when the numbers make sense. A good deal is a good deal, no matter the season or the market.
And, your ability to find good deals on a regular basis really determines whether you can sustain a professional real estate investing business or not. Luckily, implementing a marketing strategy that helps you find motivated seller leads all year long is very much in your control.
Where to Find Deals All Year Long
The trick to never running out of deals, I told Dave, is to have access to quality leads all of the time. And, as an independently owned and operated HomeVestors® franchisee, I do. Thanks to the proprietary marketing tools and resources that I have at my disposal, distressed homeowners who need to sell their properties fast know who to call for a quick response—local HomeVestors® franchisees, like me. And, since homeowners often find themselves burdened by their houses for reasons that have nothing to do with seasonality or market condition, they tend to reach out throughout the year. As a professional real estate investor who likes to make a difference, I’m happy to answer their calls and provide “solutions to ugly situations®”. With over 100,000 houses bought across the U.S. by franchisees as committed as I am, I think it’s safe to say we all are.
Get ongoing access to qualified leads to sustain your investing business all year long—call HomeVestors. There is no better time than now.
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