Should I purchase investment properties in high demand market?

Question

The housing market is incredible for sellers right now. Wondering if someone would be better off to hold on to their cash and wait for prices to drop before purchasing. However, it really puts a slow down on expanding your assets. Any input would be greatly appreciated. Thank you!

Michael Helfant · Answer

I agree with @Austen Mueller that there are some pros right now on the buy side, too. Obviously, the prices in some suburbs/markets have made the numbers tougher to make work; however, there are still plenty of markets (in and around Metro Detroit at least) where there are great deals.

We continue to get more and more feedback that the rents are crazy good right now also. While MLS comps may lag behind a bit, a lot of our clients are getting higher numbers and better returns than we initially projected. Similar to the sales market where houses are going for over ask and right away, a lot of the listed rentals are seeing the same scenarios.

While forecasting future price drops, "crashes," etc. is going to be speculative, I tend to lean towards the current knowns which is that interest rates are still low and rents are high. That being said, we are currently still actively looking and so are many of our clients.

Austen Mueller · Answer

its great for buyers too! If your buying a primary residence and live in an expensive market, well then its not so great. Debt is cheap right now and rents are very high. It could be a while before things settle down(price wise) and there is not guarantee things will fall in your favor. I say buy!