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Why Winter is Great for Real Estate Investing

by Ken Horst on January 15, 2014 · 8 comments

  
Winter is Great for Real Estate Investing

When you’re a home buyer, winter real estate shopping can be hit or miss, even in warmer climates that don’t see snow. After the holidays have ended, many people are simply looking to get back into the usual groove of things. In January, most people with children don’t want to move because it is still the middle of a school year.

When you’re an investor, though, winter real estate shopping can be a blast. The typical seasonal wisdom of buying a home is thrown out the window when it comes to the purchase of commercial and residential rental properties. Because the owner of the property is changing hands, and not necessarily the occupier, there are far fewer concerns about mid-school-year-moving. And when building owners get back into the post-holiday groove, one of the new year tasks at the top of their lists could be selling an investment property.

Read on to learn why winter is great for real estate investing.

Low Interest Rates

The Fed has been helping to keep interest rates low with quantitative easing, and though it plans to pull back this year, interest rates are still at historically low levels. For real estate investors that may be utilizing a mortgage, now is a great time to move forward, before QE3 begins to really taper off. Mortgage interest rates could be higher if you wait even a few months.

Priced to Sell

It’s the middle of winter, so many of the residential buildings and houses that are on the market now are likely there because the owner has to sell. Often that means the seller will be willing to negotiate on a price, simply so they can get the building off their balance sheet. There may also be buildings in need of repair that could sell quickly and for cheap, as long as you’re willing to put in the time, money and effort to fix any issues.

Minimal Buyer Interest

With the holidays having just passed, the new year started and winter still in full swing, many people have their heads down, unburying themselves from the work that accumulated while they were having holiday fun. Not as many people are thinking about buying, as compared to warmer months. Now is the chance for investors to be looking, before typical home buyers start getting back into the mix.

Of course, real estate markets and real estate investing is highly local. In warmer climates in the U.S., home sales barely slow down in the winter, compared to summer months. It’s best to gather information on your local market to determine whether pricing and buyer interest could impact your real estate investment purchase.
Photo Credit: Unitopia

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{ 8 comments… read them below or add one }

Gerald Harris January 15, 2014 at 6:24 am

Great Article!
I remember when I was an Real Estate Agent in California years ago, having worked for Century 21. The Broker had told me that the best time of year to buy Real Estate as an investment was the winter time because of all of the advantage you mentioned above. High Seller Motivation and price flexibility played a true key factor in getting a great deal on a piece of property. Eventhough It was Southern CA, the bargains still existed.

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Sharon Tzib January 15, 2014 at 7:34 am

This is a great tip. Another bonus I’ve found from buying in the winter is your home inspection will be performed in probably what will be some of the worst weather conditions the property will encounter. It’s a great time to find weather related defects that possibly could be undiscovered in a different season.

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Jonna Weber January 15, 2014 at 9:29 am

Nice reminder! In my experience, many new investors in our cold climate still tend to think like the general public, and begin looking in the Spring along with the retail buyers. We need to think differently as investors in order to garner different (better) results!

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Tyson L. January 15, 2014 at 12:22 pm

On a related note, as investors and property owners managing income producing real estate, winter is definitively a time to keep your guard up. Terrible time to have vacancies because of some of the reasons listed above, people don’t like to move and finding a new tenant can be hard sometimes. My team and I work hard to make sure that a lease doesn’t end in the winter months.

Great time to acquire new properties, great time to spend additional attention managing the properties you have!

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Jason January 15, 2014 at 3:44 pm

Tyson

Brought up some good points. I live in Utah, and even if I got the house at a great price because IRS winter…there is still the issue of finding a buyer if it was a fix and flip or renters if it couldn’t be sold right away.

The only strategy I could come up with is buying in February and rehabbing through March if it need that much work and have it ready to sell or rent by March/April.

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Jaz Cook January 18, 2014 at 10:57 am

Yes, these things are true even in my La Jolla real estate market. And, as you pointed out, investment properties are a total different situation from the normal residential market.

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Rob Brown January 18, 2014 at 12:12 pm

Thanks for the good information. I am a Realtor in Massachusetts but also am looking into flipping houses. This is a great time to get a head of the home buyers and start to invest!

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Bret January 19, 2014 at 4:27 pm

On a side note: the repairs are easier to negotiate with contractors due to their slow winter months.

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