Is there a good or bad time (season) to buy a rental property?

16 Replies

Hey there,  

I am getting ready to purchase my first multifamily property here in the next couple of months.  With getting together financing and all other things it is looking like I wont be able to purchase my multifamily until October/November time.  Obviously people don't like to move in the winter but is this a bad time to invest or should I wait?  

This has been stressing me out.  Any advice would be very appreciative. 

I would say you should always be looking for houses to buy. It doesn't matter what season or the state of the market. If someone needs to sell a house and it's a true deal, buy it. 

The worst you lose for trying is time and effort. The best you could gain is a deal.

Thanks Alberto, 

That is what i have been leaning towards, also I think there might be more of a chance to get an even better deal in that season.

Thanks for the post! 

Market will vary on this.  Cold weather markets are worse after Oct through March for moving tenants.  Those months are already poor for getting vacancies filled due to school being in session.

However, if you're renting 2 bed or studios, and there's not a child in sight, then it's usually just the weather causing a slow down in tenant placement.  In any case, a good deal is a good deal.  A great deal knows no season.

Thanks Joe for the information!  I guess there is no time like the present! 

I've found in my market, and I think this makes sense more most markets, that we see a spike in demand during the summer. Moves are happening to a new area before school starts, teachers are moving when they aren't working, parents don't want to move their kids while school is in session, etc. So I try to rent my houses on 1 year leases summer to summer so when they become vacant I've got the best chance to rent it immediately. 

@Daniel Wetherill

I've found between Thanksgiving and Christmas is a great time to make offers as most people are busy with the holidays and there is less competition.  Even better if you can close by December 31 and get the tax deductions!

Most rental properties will usually already have tenants so that shouldn't be an issue filling them (agreed in cold weather states people don't move much during winter).  Then transition your leases to June 1 - May 31.  I prefer to keep mine all on those dates so I manage it all at once.

Good luck!

- Tom

Wow, thanks for the responses so far...so would you agree that I stay the course and buy now as apposed to wait? 

Originally posted by @Daniel Wetherill :

Thanks Joe for the information!  I guess there is no time like the present! 

 ...and there's no better "present" than time.

Originally posted by @Tom S. :

@Daniel Wetherill

I've found between Thanksgiving and Christmas is a great time to make offers as most people are busy with the holidays and there is less competition.  Even better if you can close by December 31 and get the tax deductions!

Most rental properties will usually already have tenants so that shouldn't be an issue filling them (agreed in cold weather states people don't move much during winter).  Then transition your leases to June 1 - May 31.  I prefer to keep mine all on those dates so I manage it all at once.

Good luck!

- Tom

 Thanks Tom, 

I haven't really thought about the whole less competition during those times due to the holidays,  that is great!  I will definitely take your advice.  Thanks again. 

@Daniel Wetherill - That sort of mirrors my plan. I have the expectation of finalizing my list of properties I'm going to check out in the next month or so, and then begin making offers after October with expectation of trying to maximize my buying power based on market timing.

Originally posted by @Alex Chin :

@Daniel Wetherill - That sort of mirrors my plan. I have the expectation of finalizing my list of properties I'm going to check out in the next month or so, and then begin making offers after October with expectation of trying to maximize my buying power based on market timing.

 Awesome, sounds like a great opportunity after all!  I am more excited and confident then ever to get this deal done.  

Are you talking about something smaller like a four-plex or a large deal like a 72-unit complex? What is the current occupancy? Is this a buy-and-hold or flip scenario? Are the leases month-to-month or long-term?  Are rents at market rate? How much is the average security deposit? How is your own cash reserve situation?

I think whether or not the seasonality matters depends on what you are trying to do.  If the units are already occupied on leases ending in 2016 or later and you are buying primarily for the existing cash flows, buying in the fall could be great.  If the complex is 50% vacant and in need of repairs, buying now could be perfect timing to get the units rehabbed in time for prime leasing season next year.  

@Tim Graham

Yes, I am looking at a four family, I would like at least half rented out...I have a couple of properties I am currently looking at. I would prefer the lease terms to be full year leases and not month to month. Thanks for the confidence! I love the advice about changing the lease terms for specific months targeted around hot lease seasons.  

Originally posted by @John Cohen :

@Daniel Wetherill what size multi? If you need a manager i have a great contact in Cinncinati.

Hey John,  I am looking at four families.  I appreciate the reference, as this is my first property I will be taking on the management of the building, but as I grow I will definitely be in need of one,  I am always networking so please send me his info.  

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