I’m looking to start out in real estate but I’m seeing prices on homes of $100k-200k higher than they were 1-4 year ago.
Even fishing for leads and off market deals is it safe to rely on average per sq. ft. in my market?
Have market and prices caught up to where they should be? Or will the floor fall out from underneath us?
Please advise maybe I’m missing something as someone looking to jump into real estate investing.
The value of a deal for investment is its potential for cash flow. Because rental prices go up along generally along with sale prices (with spotty exceptions here and there), timing the market for "low and high" pricing isn't especially useful. The real impact of a highly priced market is that those prices might knock deals out of the range of your cash position. Any that are still within that range, there's no timing reason not to go for it. Appreciation is an icing on the cake bonus, and depreciation is a temporary setback the market will fix for you sooner or later.
Click on the magnifying glass in the upper right.
You’ll see people have been writing the same post as your for AT LEAST 5 years. Actually, many/most of them have said they are going to wait for “the crash” since “we’re in a bubble”. I assume they will never start. And maybe they were really just looking for an excuse not to start.
Prices will *never* be as low as they were when they decided not to buy. The real question to ask is do you think the property will be worth more in 20 years than today? Can you imagine someone with a new job saying they don’t want retirement savings taken out of their check yet because they want to wait for the crash?
The best time to buy real estate was 20 years ago, the second best time is today.
A vast majority of America’s millionaire made their money in real estate.
don’t wait to buy real estate, buy real estate and wait.
You don’t have to get rich on your first property, it’s like a free higher education class.
if you lack the courage to buy real estate when times are good how will you have the courage to buy when times are tough?
Good Luck with whatever you choose to do.
Find a place you can afford and where the numbers work. When running the numbers some places beware as the really cheap homes may look good on paper, but they are not in reality. If prices drop a bit, hold on the property and wait for them to go back up.
@Ben Flaskrud get started and don’t wait. Yes it’s a hot market and prices are high, but interest rates are the lowest they’ve ever been. Focus on properties that cashflow, and you’ll be OK through any market cycle. It really depends on your long term goals; if you’re looking to buy and hold, then buy now and hold the property through the next cycle. If you’re looking to get into house flipping right now, then that might be a different level of risk (IMO)
@Bill Brandt I’m turning some of those into bumper stickers
@Ben Flaskrud I’m not saying it will work in every market, but spent 2 hours a couple months ago comparing these high prices accompanied with low interest rates, to lower priced homes with more traditional interest rates. I found that I could afford to pay quite a bit more for the home (I’m sorry I don’t remember the exact number and it would probably end different in your market anyhow) and still cash flow the same. Interest rates are huge and if you are getting a traditional mortgage they can make a big difference.
Try evaluating your market.
@Bill Brandt Thank you I appreciate the advice.
It is not possible to time the market, period. You need to focus on buying at a good discount relative to whatever the current market is, at any given time. Buying good deals can be achieved in any market.
The good news is its always an OK time to buy because real estate is always appreciating, almost always in the long term. So the people who thought it was at an all time high 5 years ago can make a KILLING if they want to sell, or just leveraging the new equity. You'll spend more time trying to make a contract work, and you'll immediately not find the types of caprates you were finding even last year.