Buying An Investment Property

One of the most common questions asked in the real estate market is “When is the best time to buy investment property?” The simplest answer is: if you’ve got the funds and have done your research, NOW is the best time! It’s better to procure that investment and start accumulating value as soon as possible.

That being said, if you are still waiting for the funds (like awaiting a loan approval or still a couple of years out from an equity loan) or haven’t found a property you like yet, here are some pointers on what time is best for buying an investment property:

So, When Is the Best Time To Buy Investment Property?

1. Best season for buying an investment property? Fall. Properties going up for sale increase in the spring and peak in the summer. Obviously, no one wants to move in the colder, wintry months if they can avoid it so property listings drop resulting in fewer options. Listings start increasing in the spring and peak in the summer. However, with a lot of buyers on the hunt in the summer as well, you’ll likely run into bidding wars, driving prices up. There is a sweet spot though, and that sweet spot is fall! 

   By fall, many families have already purchased homes in order to settle in before the school year begins AND there are still plenty of properties that haven’t sold yet. So buying an investment property in the fall means you’ll have less competition and more options!

2. Also, try to buy when it’s a buyer’s market. A buyers market occurs generally when supply exceeds demand (similar to the tip above about buying in the fall when there are more homes for sale and fewer buyers) and buyers have more leverage. Asking prices are lower, homeowners are more willing to negotiate, closing costs are covered by the seller instead of the owner, etc. Obviously, you’ll get more bang for your buck if you’re buying an investment property in a buyer’s market. 
3. And finally, buy when you’re financially stable. Have you settled any significant personal debt, like college loans or medical bills? Is your credit score high enough (Experian says that you need a score of 620 minimum) for an investment loan approval? Have you owned your current property long enough that you can use the equity to buy a second investment property? Have you calculated costs like interest rates, down payments, maintenance costs, etc.?

If you’ve considered all of the above and are confident you can handle the additional costs, then you’re probably in a good place to buy a second investment property. Congratulations! 

Now that you know when the best time is for buying an investment property, the next question is...

Buying an investment property? We're here if you need help!

If you have any questions about buying an investment property in Mobile, Alabama, please don’t hesitate to contact us. We’re always happy to help!