Guys, is the time right to buy a rental property in the Midwest?
Friends, I've been wanting to buy a rental investment in any of the following states: IL, IN, GA, MI but im getting cold feet. Everyone is telling me to wait for a correction. Your thoughts please
I don't know of any successful investor who's fundamental strategy was market timing. The price correction only matters if you are selling.
RULE 1: Don't sell in a downturn. Simple :-)
RULE 2: Don't be forced to sell in a downturn by bad financing (it is your early properties so get fixed rate, 30 year debt)
RULE 3: See rule 2.
@Hani Alomar there's a bp podcast that talks about buying at any point in the market cycle but just knowing where to buy and what strategy to use. I would absolutely wait if you're dead set on moving in a market that appreciates much. When the correction happens, you could be in a bad place. However, in Oklahoma (and i'm sure many other surrounding states) we only saw 7.5% drops in the last downturn and in B and C class properties our rent rates stayed stable! Sure you could likely buy the same properties in OK in the downturn for slightly less, but then you waited 3+ years for a recession and in all of that time your money was doing nothing for you! Why not cash flow for 3 years?
@Hani Alomar looking for any properties in Missouri? I live in a college town with tons of potential rental properties.
@Wes Smith - I also live in a college town. We are on opposite ends of the state. I'd love to hear what REI looks like down in your area and compare notes!
@Hani Alomar anyone telling you to wait for the perfect time simply has no idea what they are doing and most likely has never done a deal. Who cares if you pay up or down 10 -15% , its meaningless when buying a 60 75k props. Its all about cash flow, you still get your 950- 1200 in rent, so again who cares if you pay 60k and a year from now its worth 50k,,, it always comes back..... However if you have the right team you will pay under the appraised value anyway .