Are you looking to invest in a rental property soon? Perhaps, you’re looking for property in the Idaho Falls area. There are a variety of factors to consider when deciding to buy a new property: the property itself, the location, possible expenses, and more. It is also important to consider certain factors on a national scale that may also impact the overall market. These may include the ever-changing mortgage rates or legislative initiatives.
But, is there a best time of the year to invest in property? The answer is yes. Historically, the winter months (November, December, January, and February) are the best time to buy a new property.
Why invest during the winter months?
As the saying goes, “timing is everything.” Even in real estate. Let’s explore several reasons why the winter months are a good time to invest.
As the cold weather sets in, fewer people are putting their properties on the market. It is just a slower time of year in the world of real estate. This occurs for several reasons.
First, there are fewer buyers in the market during the winter. And, sellers know it. Those who are hoping to sell for a higher price might wait to put their property on the market. Instead of the winter months, they will wait for the busier buying season that comes with the warm weather in the summer months.
Second, houses that have been on the market for a while can be less appealing to buyers. Summer months are traditionally when the market sees more properties for sale. Sellers who are not able to sell their property before the winter have to decide whether to keep it listed or not. Buyers are more likely to think there is an issue with a property if it has been listed too long. As a result, sellers may take their properties off the market for a few months during the winter.
Since there are fewer properties being sold during the winter, there is less competition for those investors who are motivated to buy.
As already mentioned, there are fewer buyers in the market during the winter months. Instead of looking to buy a new home, they are focusing on the holidays and everything else that comes with the end of one year and the start of a new one. People would rather take time off from buying property to spend their time with family and their money on presents or other holiday activities.
Another reason there may be less competition is that buyers with families are more likely to wait until the spring or summer to house hunt. Although they might want to find their dream home, they don’t want to uproot their children during the middle of the school year to move into a new home, and likely a new school. For this reason, they put off their search until closer to the end of the school year.
Tips for investing during the winter months
Look for motivated sellers
During the winter months, investors can search out those sellers who are highly motivated to sell their properties. These are likely to be sellers who have had their properties listed for several months. As mentioned previously, many buyers are not searching for properties during the winter months because they take time off to enjoy the holidays. And, the colder weather and snow are also a deterrent. As a result, sellers are forced to wait patiently for a buyer to come along during the slowest season of the year. While they wait, they are continuing to carry the expenses that go along with having a house on the market.
Another sign of a motivated seller is finding a property where the price has been reduced several times since being listed. Although sellers are hoping to get their asking price, they may not. After weeks of being listed with no offers, they may decide to reduce the price to generate new interest in their property. There may even be a winter discount associated with the price.
Being on the market for months and having previous price reductions are two signs that point to a seller who may be highly motivated to offload their property. This creates a great advantage for someone who is willing to invest in that property.
Put in your offer close to the holidays
Buyers who are searching and putting in an offer right before the holidays can have an advantage. Some even suggest doing it on Christmas Day, if possible. Although it might take time away from the buyer’s holiday plans, it has been found that people tend to have more goodwill around the holidays.
In addition to having more holiday spirit, sellers may be looking for a fresh start as the new year begins. This may be for tax purposes or other personal reasons. Regardless of the reason, investing close to the holidays may come with added benefits as a buyer.
Be a single bidder
With less competition in the market, there is a good chance that an investor might be the only bidder on a property. During busy months, one property may have multiple offers. This forces motivated buyers to put in offers much higher than the asking price to even have a shot of being accepted. Then, there are the all-cash buyers who can easily dominate the market.
Being a single bidder on a property gives the buyer an advantage. The buyer will be able to negotiate a better price. There might even be additional incentives that the seller is willing to throw in to close the deal.
Take the time
Along with possibly landing a better deal, less competition may grant buyers more time to search for the right property. Real estate agents and mortgage brokers are not as busy so they can pay more attention to buyers. This can help the process go quicker once the buyer is ready to move on a property.
Buyers should also make sure they take time to really inspect the property. Winter months can come with snow. Snow can mask issues with a property, especially around the exterior and the landscaping. Buyers should ask to see photos of the property during the spring or summer. They should also have the property thoroughly inspected.
Whether you’re interested in investing in a rental property during the winter months or waiting for warmer weather, we would recommend these additional articles for more tips on buying a rental property: “7 Tips for Buying a Rental Property” and “Things To Consider When Buying a Rental Property.”