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2023 May Be a Great Time to Buy a Rental Property

(Published on - 12/12/2022 11:29:36 PM)

 

 

2023 May Be a Great Time to Buy a Rental Property

A lot of prospective buyers aren’t feeling like now is a great time to buy real estate and are either hoping for a major crash, or a huge price correction.

Only time will tell if either of those will happen to the extent some buyers are hoping for, but while they’re waiting it out, it might be the perfect time for real estate investors to get themselves a deal on a rental property.

It’s never a good time to buy real estate for everybody, and over the past few years it wasn’t ideal for investors. A seasoned real estate investor can typically find a deal, regardless of the current real estate market, but the extremely low mortgage rates caused a lot of buyer competition for the limited number of houses for sale, which made it virtually impossible for investors to buy a property at a profitable price. With rates rising and the market slowly shifting, investors will start to see more opportunities.

Here are a few reasons why it may shape up to be a great time to buy a rental property, beyond having less competition:

  • Many of the people who are afraid to buy (or simply can’t buy) due to higher rates and prices, are renters who need a place to live.
  • Rents have been on the rise recently, due in large part to the high demand for rentals and lack of places for rent.
  • In their plan to “reset” the real estate market, The Federal Reserve has been actively trying to increase the amount of houses for sale by raising interest rates, which should give you more options to choose from.
  • While many homeowners are in good financial shape, have a lot of equity in their home, and will simply stay put rather than sell in the shifting market, some homeowners will absolutely need to sell. Those who are negatively impacted by the economy—like losing a job and having a tough time making ends meet due to inflation—might have to sell their property quickly. (You might even start seeing short sales or foreclosures again.)

While there will likely be more opportunities to buy a rental property, they probably won’t be a no-brainer that just falls in your lap. Here are a few things to do and keep in mind if you want to capitalize on the shifting market:

  • Have your finances lined up. Set a budget for how much you’re willing to spend on a property. If you need a loan, get pre-approved for a mortgage by a lender so you know how much you have to work with. If you’re paying cash, set a limit on how much you’re willing to part with on your first property.
  • Establish what type of property you’re looking for. Investment properties come in all shapes and sizes; figure out what appeals most to you. For example, do you want a multi-family with several rental units, or would you rather have a single-family rental?
  • Figure out where you want to search. Where is your ideal location? Do you want a property in your town, or one in another area altogether?
  • Be patient, but ready to pounce. Just because a property had a price reduction, that doesn’t mean it’s below market value and a good deal. Finding properties that will produce good cash flow and return on your investment may take a little while to find, so be patient. But when you do see one that’s clearly below market value (or you can negotiate down to that point), don’t hesitate; get it before someone else scoops up the opportunity.

The Takeaway:

It hasn’t been easy for real estate investors to find a decent deal over the past few years, let alone be able to buy a property at a profitable price due to competition from other buyers. But with many buyers sidelined because of the rising mortgage rates, and some property owners negatively impacted by the economy, 2023 looks like a promising year for investors to find a rental property where the numbers make sense.


Forget About Walking Down The Aisle Millennials Want To Buy

(Published on - 6/3/2019 4:56:16 PM)

 

For years, most people followed a similar path. Go to school. Get married. Buy a house. But for many millennials, that path no longer makes sense—and purchasing a home has moved up the priority list.

According to a recent survey from LendingTree, 24% of millennials want to purchase a home before they get married, and another 27% are putting off starting a family until after homeownership. In fact, 43% of all first-time homebuyers in the US are single!

The Takeaway

If you’re a millennial and homeownership is your top priority, you’re not alone. There are plenty of other millennials who are buying homes before getting married or starting a family. So if that’s your plan, don’t wait. Now is a great time to make a move and turn your dream of homeownership into a reality.


Is there a perfect time to sell your home?

(Published on - 6/3/2019 4:49:04 PM)

 

Selling your home is a big decision that you don’t want to take lightly. When it comes to putting your home on the market, you don’t want to make a mistake that will end up costing you much more than you anticipated. And once you decide you want to sell your home, there are many things to think about before listing it, including the time of year (and time in your life) you choose to sell. Here’s what you should consider before selling your home, and whether or not there is a perfect time to do so.

 

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7 Pricing Myths You Need to Get Past If You Want to Sell Your Home

(Published on - 12/21/2017 8:52:20 PM)

 

When homeowners are preparing to put their properties on the market, one aspect is usually foremost in their minds: money. Setting the asking price accurately can mean the difference between getting an offer quickly and having a house languish for months, drawing little interest.

With that in mind, it's important that potential sellers block out a lot of the noise that often surrounds the intricate art and science of pricing. There are plenty of myths that may cause sellers to lose sleep at night as they attempt to separate fact from fiction.

The following are statements that can stand in the way of a successful sale.

1. 'If we keep waiting, a better offer will come along!'

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When sellers receive an offer from the first showing, they may be skeptical or hesitant to accept it, wondering if other prospective buyers would be inclined to pay more. Thoughts of potential bidding wars could cause sellers to want to wait and see who else falls for their place. But, remember the old adage, "A bird in the hand is worth two in the bush?" There's no guarantee other would-be buyers are waiting around the corner. If the offer is a fair one, entertain it and count your blessings.

2. 'Getting an offer right away, means the agent priced it too low!'

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When sellers receive an offer early in the process, as excited as they might be, many can't help but wonder, "Should we have asked for more money? Did our agent price it too cheaply?" While it's natural to be skeptical (and even a little greedy), receiving an offer on the early end of the spectrum most likely means your home was priced accurately and attractively. If you trust your agent, you know he or she didn't pick a number out of the sky, but rather based it on extensive market research. So, be glad your sale is moving in the right direction.

3. 'We should price it so there's room to negotiate!'

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Let's be honest: Most sellers would love to get top dollar for their homes. But overpricing it with the intention of being willing to accept a lower offer may just leave you empty handed in the long run. Plus, if you have to drop your ask multiple times, buyers may begin to wonder what's wrong with the place - other than the price, that is.

4. 'That's not what my Zestimate says it's worth!'

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Have you ever noticed how homeowners are eager to believe Zestimates or other automated valuation models when that price exceeds their expectations? Yet, when the opposite happens, they assume it's outdated or erroneous information? The point we're making is, these numbers can be inaccurate, so again, trust your agent over the Internet. Enough said.

5. 'We can add all renovation costs to the asking price!'

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Sellers may adore the improvements and renovations they've made and want to add in those costs to the asking price. But remember, not every change is going to land a huge return on investment. If you're curious about what you can expect on those fixes, check out Remodeling Magazine's annual 'Cost Versus Value' report to get an idea of which upgrades yield the biggest bang for your buck. Also, as you're making changes, bear in mind that the infinity pool you view as an asset may just seem like a huge liability to a buyer.

6. 'My Realtor® overpriced my house to make a larger commission.'

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Agents are paid a percentage of the selling price of the home. However, even if they were to raise the ask by $25,000, in most cases that would yield an additional $1,500 in commission, which would then be divvied up between the broker the agent is working for and the buyer's agent, leaving your agent with less than $750 more in his or her pocket. It's hard to imagine an agent would blow a potential quick sale - and take on weeks or months of additional showings and marketing expenses - for a few hundred dollars.

7. 'Reducing the price is a sign of weakness!'

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While no homeowner is eager to drop the listing price, if time is passing and there's been little interest, it could be time to consider lowering the ask. Remember, time is money. While you're waiting for someone to meet your price, you're still paying the mortgage, taxes, utilities, and insurance etc. Plus, sometimes, lowering the price can put your home in front of a group of new buyers, which could generate a lot more interest and, ultimately, get the price back up closer to where it was in the first place.


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