Should I Invest in Real Estate this Holiday Season?
It might not be a bad idea. The holidays certainly find most people taking a break from work life or focusing their energy on things that don’t include day-to-day routine or big life changes. It’s a festive time. You might not be thinking about investing and others certainly aren’t thinking about selling. But that’s not the case for everyone. Let’s look at why you might want to think about making an investment during this time:
- It’s well known that home prices tend to be lowest during the month of December. It could be an ideal time to find a good deal on a home. And it could get better:
- Sellers at this time of year are usually highly motivated and are inclined to sweeten the pot—knowing that they can more easily entice serious buyers.
- It’s a prime market. Recent reports on Zillow show that the market is returning to normal. With that, there are more homes available and prices are dropping, even as home values continue to rise (but at a slower pace). Couple that with the current low mortgage rates and you could put yourself in a position for steady, reliable growth. But don’t wait. It could cost you as rates rise.
- Less competition. There are less people buying during this time of year, which means you might be able to negotiate more easily for a better price.
- You can save a little, on taxes. If you manage to close on a home before the end of the year, you can deduct costs of the purchase.
Be Aware of Potential Pitfalls
It can be a really favorable time to buy, but that doesn’t mean it’s without risks. If a seller is highly motivated, just be careful of what they might offer to make the deal more appealing. Some lenders have guidelines that don’t allow for certain perks to close the deal.
Also: If you decide to invest in a home that is exposed to snow, remember that snow can hide a lot. Be extra diligent about checking for defects. Ask for photos from the snow-free seasons and do a thorough inspection. If you get the sense that buyers are trying to hide something, go with your instincts and walk away.
Bonus Tip: If you’re having trouble finding a home to buy, look into homes that were previously for sale and didn’t sell. Additionally, ask your investment cohorts—like property managers and investment realtors—if they know about houses that may not be listed but are being prepped for sale.