Uncertainty doesn’t necessarily create confidence when it comes to investing in real estate. Employment and housing changes could be right around the corner. Or maybe not. One of the things no one saw coming was the continued strength of the housing market across much of the country. You would think the time isn’t right to buy property, right?
Well, you may want to think again. It is in these types of times that people who are on the fence or conservative will step aside. Even those with careers or income they feel secure with and possibly some savings may delay. This may leave a significantly smaller group of buyers and overall, less competition for properties.
Real estate, as many things to do with finances, typically functions in cycles. If you are in the real estate market long enough you’re likely to encounter these peaks and valleys. By making sure to run your numbers and making smart purchases, you’ll be able to sustain the changes.
When there are less buyers in the market there are some opportunities that present themselves to the people who are still buying.
Here are a few areas where you may be able to make a changing market work for you:
You may be able to negotiate a discount on the purchase price
- When there are less buyers in the market for homes, you may have a better opportunity to save on your purchase price. When there is caution and offers take longer to get and there is a likelihood that there are contingencies that may delay or halt the sale, you may be able to structure an offer that is very attractive to a seller.
When there are less buyers, there is less competition
- In a sellers market, you need to move quickly when a good property comes along, or you risk losing out. In a slow market (with fewer buyers around), you’re not so pressured to immediately seal the deal. In fact, delaying tactics can often work in your favor, especially if the property has been sitting on the market for a while, which is often the case during a slower market or a recession. You’ve got more time to crunch the numbers, do proper due diligence on the property so you’ve covered all bases. If there is a seller who needs to move for a specific reason you may be able to offer them quick resolution. Maybe there is deferred maintenance, an old roof, 30 year old furnace, you get the picture. All of these items give you opportunity to negotiate a more favorable purchase price. Especially when there may not be other buyers eager to purchase.
Vision and Opportunity
- If you’re buying somewhere around the bottom / slump stage of the property clock, chances are high you’ll be buying your property “at market value” or “below market value”, rather than an over-inflated price in the recovery or boom stage of the property cycle. When the market eventually rises, you’ll be the first to benefit. Just like the share market, when you buy low & sell high, you make the maximum gain.
Contractors May Have Increased Availability
- In times where there are less people renovating homes, contractors are likely not as busy. When things are busy, they can pick and choose jobs they want to take at the price they set. Suppliers may also be more willing to work with those who are working and offer discounts. If you have the ability to secure competitive pricing on the labor and materials of a project it can be helpful to your overall budget.
You’re Buying For The Long-Term
- At the end of the day, it’s hard to find another investment that’s going to give you the same potential as real estate. There will always be a need for housing. If we look at the past one thing is certain, we never know when the market will shift. Waiting to take action when the market hits the bottom will still be a bit of a guess. Don’t wait and miss out on the opportunities that are available now.
Ready to take that next step when it comes to flipping?
That’s why I’ve got additional resources to help you get the information you need to move forward on creating your flipping life.
Make sure you have the Fixer Upper Checklist so you know which areas are key to added value in a home.
There are several videos available on finding houses, renovations, and funding on the Threshold Homes YouTube Channel. Check out your favorite flipping topics and new videos weekly.
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Want to buy a property and renovate it?
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