When is the best time of year to buy a house for real estate investing? There are so many things to consider when buying an investment property. Two of the most important are location and time. We’re always highlighting location, but what about time? And more specifically, the best time of year to buy a house? Knowing the best time of year to buy a house will help you find good real estate deals. And with current price surges across the current housing market nationwide, one could use a good deal.
Knowing things like the best time to invest is part of real estate investing. All successful real estate investors keep up with the real estate market trends, seller and buyer habits, and demographic and economic changes. We’ll explain below how these trends can aid you in determining what the best time of year to buy a house is for investment purposes.
Why timing is an important factor to consider
So why does timing matter when buying a property?
Time is often a determinant of property prices. That is to say, the same property will be listed under different prices at different times of the year. The cause behind this is simply the forces of supply and demand. Furthermore, when the national real estate market slows down, competition eases. And it’s always easier to find real estate deals when there’s less competition in the market.
The time of year you’re considering could also be a determinant of how many days an investment property has been on the market. The longer a property has been on the market, the better for the buyer – and a sign of a buyer’s market. As a buyer, you have more room to negotiate price when a property has been on the market for a higher number of days. During slower months, you’ll note that properties spend more time on market listings.
In this blog, we’ve taken both price and number of days a property spends on the market to determine the best time of year to buy a house and the worst time of year to buy a house.
How do you know when it’s the best time of year to buy a house?
While you need to consider several factors, you may want to focus on demographic changes. People usually consider buying or renting a house when they’re moving from one place to another for school, work, etc. Accordingly, people often try to move by the end of the summer or the beginning of the school year. The high demand during these months will cause a “peak season” accompanied by a peak in prices. So if you’re an investor looking to buy a property, consider doing it during these peak seasons.
So when is the best time of year to buy a house?
Generally speaking, the best time of year to buy a house for investing is the winter season. The nation’s real estate market slows down in winter months, and that’s when you’ll find the best real estate deals. More specifically, the best month to buy a house is January. According to data compiled by FitSmallBusiness, January has the lowest median sales price of $254,914 and is the month where properties stay on the market most – 104 days. This data is suitably working in your favor as a real estate investor. And knowing these numbers will help you figure out when it is best to invest in property– which will eventually help you make money in real estate.
When is the worst time of year to buy a house?
We’ve talked about the best time of year to buy a house for real estate investing, but what about the worst?
In general, you want to avoid summer months, and June more specifically. June has the highest median sales price of $307,571 and is the month where properties stay on the market the least – 67 days. And as aforementioned, summer months are usually when people prepare to move and are on the lookout for new homes. The high demand causes higher competition and an increase in prices.
It’s important to consider factors other than price
It’s important to take into account how well the property will do after the purchase. So far, we’ve considered price and number of days spent on the market to determine the best time of year to buy a house. And while this is a rational way to look at things, it is not enough. Just because a property is a good deal doesn’t necessarily mean it’s a good investment. The property you decide to purchase may be inexpensive at the time of purchase, but it also may not be profitable.
When buying an investment property or a rental property, it’s important to look into indicators like CoC return, capitalization (cap) rate, average rental income, different cost assumptions, among other factors. Mashvisor can give you insight on the above data, with comprehensive investment property analysis and comparative market analysis. To learn about your options for signing up for our services, click here.
All things considered…
To sum things up, when figuring out the best time of year to buy a house, make sure you look into indicators like the number of days an investment property spends on the market, median price, and profitability markers. Additionally, make sure that you’re keeping up with the latest market trends and that you’re always well informed about the real estate market you’re investing in.
Keeping the above in mind, you have to remember that real estate investing is a process. We can offer you many tips on the best way to invest in real estate, but there’s no easing your way out of things. You have to be patient. And while time is crucial, you also don’t want to buy the first property to come your way.
Finally, it’s important to mention that the above data and information may not apply to all markets across the US. A buyer’s market conditions in Houston, Texas is definitely different than a seller’s market in San Francisco, California. So be sure to know your market well so you can optimize your investment!