With 2019 coming to an end in a few short months, real estate investors may be wondering if 2019 is the right time to sell investment property and buy another one. The short answer to this question is YES. Indeed, the vast majority of real estate experts agree that 2019 is a good year to sell a house that you own. They also agree that 2019 is a good year to buy a house for investment. But why?
This article will explore the reasoning behind the viability of selling your investment property this year and buying another. Then, we will explore a few real estate investment tools that will help you find investment properties after you sell your investment property. But first, let’s take a look at the current housing market.
US Housing Market 2019
Home Prices Are Rising
Home price growth slowed in the second half of 2018, particularly when the Federal Reserve increased interest rates shunning away buyers from entering the market. 2019 is different, however, as mortgage rates have been falling significantly encouraging more buyers into the market. This, in turn, will drive US home prices up. With home prices rising, a real estate investor could sell now and potentially benefit from the higher price gains this year. You will then be able to afford to upgrade to buy a newly developed rental property (before prices get even higher) and eventually earn higher rental income.
The second half of 2018 marked a difficult time for investors to sell investment property as interest rates had risen up significantly. Interest rates peaked in November 2018, up to nearly 5%, discouraging the buying of investment properties and homes. The rising interest rates at the end of 2018 indicated that 2019 may not be the best time to invest in real estate.
As mentioned, in January 2019, the Fed Reserve interfered and committed to changing its monetary policy at the start of this year and lowered interest rates. Upon the policy shift, interest rates went down to just over 4%, as opposed to the initial forecast of 5.5%. Another interest rate cut occurred in July 2019. The decreasing interest rates have, in return, encouraged investors to buy properties. For this reason, selling your investment property now means not only will you find higher demand, but you can also buy another with a new mortgage- lowering the costs of owning a rental property this year.
Is the Real Estate Market 2019 a Buyer’s Market?
Is the market shifting towards a buyer’s market? Before answering the question, let’s define what buyer’s and seller’s markets are. A seller’s market is when there are more buyers looking to buy properties than there are available homes on the market. It is when demand exceeds supply. Meanwhile, a buyer’s market is when there are more sellers looking to sell investment property than there are buyers searching for homes. A buyer’s market occurs when supply exceeds demand. The US housing market has been a seller’s market for some time now. However, the current real estate market trends foretell a shift towards a buyer’s market.
But, it’s still currently a seller’s market and it seems this trend will continue to the end of 2019. Essentially, the 2019 US real estate market is a seller’s market with some favorable conditions for buyers like lower mortgage rates, so it makes sense to sell now and buy soon after before there are any more major shifts.
What About Home Equity?
Many real estate investors who bought properties during or shortly after the recession have higher equity and are now selling their properties to buy another, a trend that has recently emerged. Investors who bought property during the recession benefited from the historically low interest rates and lower home prices that were still in recovery mode. Those investors, therefore, enjoyed more equity in their properties, and the higher the equity, the higher your net from the sale of the home. With interest rates falling in 2019, investors have been selling investment properties to get more from the sale and afford to put a higher down payment on their next house. If you fall under this category of investors and/or have high equity in your property, we then encourage you to sell investment property to buy another, particularly amidst the falling mortgage rates.
How to Sell Investment Property and Buy Another
How to Sell Investment Property
You can choose to sell investment property with a real estate agent as they will facilitate the transaction for you. A real estate agent will take care of the entire process from listing and staging your property, through marketing it and finding a buyer, to drafting the contract and closing the deal. As a matter of fact, selling investment property with an agent requires much less effort than selling on your own.
Alternatively, you can choose to list your property for sale yourself on different websites, like Mashvisor. This method of selling will allow you to go off the market and attract more serious buyers who will allow you to close quickly and move on to the buying process.
How to Buy Investment Property
Buying an investment property requires deftness in planning. When you are looking to buy an investment property, you want to get your financing in order, find a location with the best investment opportunities, and use real estate comps to land on a property that aligns with your finances and income goals. That’s where Mashvisor comes in. Mashvisor offers sophisticated real estate investment tools to help you find the best investment property with the highest return on investment. Here’s how Mashvisor can help with your property search and purchase:
- To find locations that enjoy good investment indicators, resort to the Heatmap Analysis Tool. Read Real Estate Heat Map: A Revolutionary Tool for Neighborhood Analysis to learn more.
- To find properties within a location that have a high return on investment, explore the Property Finder Tool. To learn about the Property Finder Tool’s features, read this guide: Rental Property Finder: A Revolutionary Tool for Investing in Real Estate.
- Finally, to calculate your rental income and decide on a rental strategy, resort to the investment property calculator. To learn more about what the investment property calculator can do, read this guide: Investment Property Calculator: Real Estate Investing.
When you are using Mashvisor’s tools, not only will you get access to the most recent real estate data but you will also ensure accuracy in the analysis and results you get. To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
With the decreasing interest rates, rising home prices, and strong real estate appreciation, selling your investment property this year to buy another one makes for a smart investing decision. Upon selling your investment property and buying another, we encourage that you resort to Mashvisor and its real estate investors’ tools. To learn more about Mashvisor and the services we provide, visit Mashvisor today.