The truth about buying in the winter might surprise you. If you are buying an investment property, the winter might be the best time you can do it. Here are four reasons why.
Reason #1: In the winter the competition from buyers is less. That means you are less likely to end up in a bidding war over that great investment property. It is true that inventory on the market is usually down as well, but that does not mean good properties are not available. Many buyers and investors simply stop looking to acquire properties during the holidays; so being active during this time can give you an edge.
Reason #2: New Year’s and spring are coming up. While the holiday season may be a slower time for tenant move in’s, the new year always brings an uptick in the rental market. Many people like to or are in need of changing their living situation at the start of a new year. Professionals may be changing jobs or being transferred to a new location for work. The holidays can cause a lot of stress in relationships and some do not last, which causes couples to split; this means one of or even both people may need to find a new rental. While others may simply just want to rent a new house for the New Year. Whatever the reason, the weeks just after the New Year is traditionally an active time in the rental market.
If you are purchasing later in the winter after the New Year, then you are already closing on a time that is more active on the rental market then during the holidays. You are also purchasing with spring just around the corner. Spring is always one of the busiest times of the year for the rental market.
Reason #3: It might be best to renovate in the winter and be ready to rent in early spring. This reason is specific to investment properties that require some work after the purchase. The winter can be a slower time for contractors and therefore you are more likely to get work done faster and for less cost. Painters for instance can have higher rates in the summer months as they are booked doing exterior painting, which means if you need a full interior repaint done you have more available painters to choose from. This should result in better pricing for the work. The same holds true for many other trades, such as roofers, carpenters and general contractors.
Reason #4: You can see how the house is holding up against harsher elements. Buying a home during the winter means you will be doing your home inspection during the winter. That will mean more rain, or snow, more wind and all-around harsher elements. This will let you clue in on where the roof is leaking or if you have water issues in the crawl space. Some issues like water in the crawl space may not be able to be known if you are doing your inspection and things are dry, like they are during the summer.
Remember too that when you located a home to purchase as an investment property you will also have time to factor in, closing the purchase. If you are using traditional financing options and going through an inspection period, you will most likely have around 30 days from when your offer is accepted to when you are in possession of the property. This means if you buy a home in December you most likely will not have it available to rent until January, even if the property is completely ready to be rented [also called “turnkey”].
If you are considering adding an investment property to your financial portfolio then please do not discount buying in the winter. If you wait you could be losing out.