Buy first investment property now or wait?

Question

Hi everyone!

I am newbie and I am ready to buy my first investment property. I got pre approval and looking for properties now. A lot of realtors and investors talking about 2021 house market crash and that the prices are to high now. Is it safe to buy now or better wait? Please advise. Thanks

Paul Shannon · Answer

Timing the market is hoping to get lucky.  Usually when all the headlines direct the masses to a forgone conclusion (market crash is sure to come in 2021), the exact opposite happens.  Maybe it will happen, but waiting to get started until your crystal ball shows you the future will lead to inaction.

Not saying throw caution to the wind.  As others have said, have multiple exits, have extra reserves, etc.  But if you plan to hold for the long-term, this crisis won't have much of an effect on your long-term results.

If you are buying to flip, make sure the numbers work as a rental too.

Sarah Brown · Answer

What are your goals with your investment property?  Are they long term or short term?  If long term, don't look at the short term market changes to make your purchase.  You need to consider the long term outlook.  Run your numbers and if it works, it works.  As an agent and investor I am still looking at properties.

Petronilo Rosel · Answer

I'm in the same position and am hearing a lot about a "potential" dip in the market in 2021. At the end of the day if the numbers make sense the numbers make sense and money can be made in any market. Also, unless you are trying to do a flip or do some short term investment, real estate will usually appreciate in the long term. Good luck!

Jeremy Wirths · Answer

@Bekzat Baylarbekov if the numbers make sense why wait? A deal is a deal in any type market. Being where we are in the market cycle you might want to change your criteria some but that's up to you. Have a couple exit strategies planned. Best of luck finding that first one!

Andrew Powers · Answer

If you're truly ready and the deal makes sense, buy one. If you are concerned about a potential market crash, then protect your investment by having exit strategies as said above and buy property under market value in case values decrease.

What are your investment goals? What's your risk tolerance? On a macro scale, in general:

-if doing long term buy and hold, not much changes over the long run (say 15+ years) as real estate values tend to steadily increase over time. Life changes and you may find yourself needing to sell a property unexpectedly, so keep that in mind.

-if doing short term buy and disposition, real estate values may decrease so it is potentially more risky in this economic climate but not impossible. Make sure purchase price is below value, rehab costs (if appl) are accurate, rehab time is short.

Bekzat Baylarbekov · Answer

Thanks for all the replies. Very helpful!

My goal is to buy rental property for a long run with 200-300$ cash flow and at least 10% ROI. I guess need to buy the right one according the numbers.

Buy first investment property now or wait?

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