There are a lot of factors that go into buying a rental property. Location, mortgage, interior, exterior, and expenses are some of the main physical stuff buyers tend to focus on. But what about the one abstract we wish we could have more of? What about time? Specifically, when is the best time for buying a rental property?
The answer is pretty straightforward. When snow begins to fall and the birds head south, it’s the best time of the year for buying a rental property. The holiday season, that is, November, December, and January, is the best time to buy a rental property. And if we were to really break things down, Christmas Day is the best day of the entire year for buying a rental property.
So, why exactly is the best time for buying properties in the winter?
If people want to move into new homes, they tend to do so during the spring and summer. The reason is obvious: it’s easier to move around since its warmer, especially in the northern states. Since multiple buyers are looking to purchase during these warmer times of the year, the competition tends to increase. This gives the seller an advantage and buyers, especially beginners, a disadvantage. However, when the seasons reverse, the conditions do too. During the winter, less people are trying to buy properties. Adding to colder temperatures, most of the year’s holidays fall around this time. People tend to focus on buying other assets or products as presents, usually not investment properties. So, if you decide to go against the norm and buy a rental property in the winter, you won’t have to compete with as many. Negotiations become more likely in your favor, and you’ll be able to secure a deal with less stress.
Related: Is it a Buyer’s Market or a Seller’s Market?
Sellers just want to sell
As just mentioned, there are less buyers during the holidays. This might not bode well for some sellers, especially if the property has been sitting, waiting to be purchased, for quite some time. Some of these sellers may not want to wait till spring to wait for buyers. Instead, they will try to sell their property as soon as they can. And again, as previously, mentioned, this will give you an advantage in negotiations.
While a number of sellers will become desperate during this time, some may hijack the opportunity as a selling strategy. The property could be in a pretty bad condition, which could be why it hasn’t been purchased yet. Or, the seller is just purposely waiting for the season to list their property on the market. Not only is there less competition in buying a rental property, there’s less competition in selling one, too. Inspect the property before you purchase it. Don’t rush through the process, take your time.
Related: Buying Your First Rental Property: FAQs
Prices drop with temperature
So, less competition + more desperate sellers = lower prices. Even without these effects, property prices tend to drop towards the end of the year, especially around Christmas. As a general real estate 101 rule, when the year gets colder, buying a rental property becomes cheaper.
Even during the best time of the year to buy properties, there are a few downsides to consider.
Not as many properties available
Since more sellers are enjoying the holidays, there will be a lack of properties available on the market. Not only is the number of properties reduced during this time, but the diversity of properties is decreased as well. If you are interested in a very specific and uncommon type of property, chances are you might not be able to find it during this time period. If you’re not as picky with the kind of property you want, you’re more likely to find something suitable. Common properties like single-family homes and condos will most definitely be available at some level.
Related: Why You Should Invest in Single-Family Homes and Not Multi-Family Homes
Property issues hidden by snow
Properties look different during different times of the year. This is something to remember when buying a rental property during the winter. A property may seem great and up to your standards during the winter, but will look different once the snow has melted. Surprisingly, snow can cover a lot of things about a property, most notably the exterior. Some landscaping features may look completely different during the spring.
To avoid the “sudden spring shock”, be sure to know what the property looks like before and after winter time. Ask for photos from the seller. Also, inspect thoroughly before the purchase. As previously mentioned, some sellers take advantage of low buyer competition and will therefore place unsuitable properties on the market. Once you feel comfortable with what you’re dealing with, go ahead and make that purchase.
Work during the holidays
The holidays are the time of year to relax, reenergize, and be with family. Not if you’re an ambitious real estate investor. Jokes aside, if you plan on buying a rental property during the best time of the year, chances are that you will have to sacrifice some time that most would use for time off. But again, this con is still a plus, because as already mentioned for the millionth time, there is less competition to deal with and lower prices for properties. Sometimes, to really stand out, you must deviate from the norm. It will all pay off in the end, be patient and work hard. Go out there and start buying a rental property.
As the old saying goes, time is money. And that saying certainly holds true during the winter. While buying a rental property in the winter is not ideal in some areas, there are some noteworthy benefits waiting ahead. Don’t miss out on the opportunity.
For more on buying a rental property, many other real estate topics, and in-depth property searchers for US real estate, go ahead and visit us at Mashvisor.