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Tuesday, 17 September 2019
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This Old House - Do-it-Yourself

4 Ways to Determine the Best Time to Invest in Real Estate

Written by Posted On Thursday, 01 August 2019 07:44

Investing in real estate can be complicated. There are many factors that you need to look at before handing over your hard-earned money to the first person that offers a seemingly good deal. You don’t want to buy a property to find out later you could have gotten it for half the price if you had only waited a few more months. Also, you want to avoid getting stuck with a mortgage that will keep you awake at night. However, it is possible to get a bargain as long as you know what you are looking for. By following simple principles, you can improve your chances of finding the right property for you for the right price.

Look at Your Finances

The first factor you should take into consideration before investing is the state of your finances. Your current and future income plus your credit score determine how feasible is for you to invest in real estate. If you have a high income and credit score, you will be able to buy homes and other properties more easily. Money saved in the bank may help you secure a property for less cash as well. That way you can use the money for the deposit to lower mortgage payments.

Before taking a loan, consider your options carefully. FHA and multifamily loans are a few of the alternatives available to you to finance your purchase. Study all your options carefully before picking one and make sure you are getting the lowest interest rate possible. Also, consider using a land trust if you want to keep your anonymity when buying properties, especially if you are well-known. In other words, investing when your finances are looking good is the right move.

Analyze Price Trends

No one can say that the price of a property is not important. For the most part, prices determine if you can buy a piece of real estate at any given time. Your average mortgage involves paying for about 20 or more years. That’s a pretty hefty investment that shouldn’t be taken lightly. Research the market and find out if there is a buyer’s market. Pay attention to the average prices of properties in the area you are interested in. If prices seem lower than the average, then there are likely more people selling properties than buying, which is a good sign for you as an investor.

Consider the Seasons

There’s no denying that the time of the year plays an important role in the price of properties. Since you desire the lowest price possible, you have to look at the time when buyers are scarce, and plenty of sellers are available. Which time is that? Winter. As you may imagine, people aren’t inclined to buy and move when a blizzard is depositing several feet of snow over them. Moreover, the proximity of the holidays makes people happier and more open to negotiating with you, allowing you to get better deals.

Think about Your Life Circumstances

Investing in real estate also depends on your situation. If you were about to get married, you wouldn’t proceed as if you were single with no prospects. Both you and your partner’s income and preferences would affect your real estate investments.

In the same manner, someone that is close to being divorced is not likely to purchase the same property as a person that is happily married. A single individual may want to acquire a small apartment. But someone with a big family would probably be inclined to get a large home with a big yard even if an apartment is much cheaper.

So it isn’t always about that the price of the property. It all depends on the needs of individuals at a specific time. Believe it or not, the choices you make in your personal life influence the way you invest. Your current life situation affects the timing of your investing, and you should pay close attention to it.

There are indeed many factors that are beyond your control when trying to invest in real estate. Market fluctuations and personal finances can vary dramatically in a short period of time. Still, if you are patient and research carefully, the opportunity will present itself, and you will be able to land the deal you want.

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