Thinking about investing in real estate but wondering about timing? Some Say, Smart move, I say otherwise!
If you’re an investor thinking about diversifying out of Wall Street stocks and into rental real estate, or if you are an active real estate investor thinking about improving your investing to invest more profitably, then perhaps you’re wondering, “When is the best time to buy investment property for Georgia investors?”
The Answer is … Anytime!!
As many savvy investors know, it’s not really about when you SELL a property that the money is to be made in a deal, but rather it’s about when you BUY the investment property and how you buy your property. The important part is knowing what your exit strategy will be. Buy low, Sell high is for flippers. Buying on good terms is for your long term investors. Are you rehabbing? Are you riding the market trends for appreciation? You may not be able to “time the market” perfectly but you can certainly watch the trends and make smart buying decisions to buy attractively-priced properties based on what the market is doing… at that time. Here, we are talking about rental property. With rental properties, the important part is the terms at which you acquire the property. The return on your investment property depends on if you buy with a down payments and finance the rest or buy the property out right with all cash.
Would you pay $200,000 for a house that rents for $1000 per month? The short answer is, it depends. That may be a good return for properties in your area. Let’s go over some typical tips you hear about AND tips of what else you should think about when building your rental portfolio.
3 Tips To Know When Is The Best Time To Buy Rental Property For Georgia Investors.
Tip #1: There’s a balance between buying at the right time versus getting caught up in “analysis paralysis”. Hang around real estate investors long enough and some are aggressive action takers while others just end up thinking and analyzing and waiting (years!) for the best deal to come along. Unfortunately, some investor will never buy because they ALWAYS find reasons not to buy.
Get someone to make you accountable. Especially buying your first rental or making a rental out of the house you are moving out of. The trick is to not let your fears control your decision making process. Stick to the numbers. If the numbers are good and you know about 60-70% of everything about the property and you still like it… buy it. There are literally hundreds of ways to buy and sell rental properties. If it doesn’t work out, someone else will want it.
On the other hand, it is important to do your due diligence and to determine if an investment is right for you. I suggest letting your first rental be a house that you lived in. That way you will have some ideas of what it takes to maintain a house and finance a house before you jump into managing tenants too. An owner occupied house is usually a better quality house than an investment property which means your first house will cash flow better, as long as you didn’t pay too much. There’s a balance. Connect with us and we’ll help you find a potential investment that may be a good fit for you. Just call Double D property Solutions at (478) 256-9947 to speak to our team about what you’re looking for.
Tip #2: Buy low. This might seem obvious but it’s important to mention. If you’re watching the market and trying to figure out when is the best time to buy investment property for Georgia investors, here the best indicator; Buy when everyone else is selling and sell when everyone else is buying. It’s easy to fall into the trap of waiting for the bottom of the market. Predicting the peaks and valleys of a market takes practice. Close is good enough. Don’t decide to wait for the prices to come back up so you know that you won’t lose any money on the value of your asset. Investment property values are always changing.
Again, this advice is for investors flipping a house. Until the market reaches the point where you want to sell, who is going to pay for the house? A tenant. Even if you paid a little too much for a house; as long as the rental creates cash flow, don’t worry about it. No rental will lose money as long as it is managed properly and held long enough. Over time, property values will always creep up and the tenant will pay down the mortgage for you… creating equity to live on later.
Tip #3: Buy now. The third tip needs to balance out the first two tips: buy now. Rather than waiting to see if prices will go lower, or waiting to see if there’s a better deal in the future, it’s often better to buy a good deal at a good price and enjoy good cash flow now, then to wait for a perfect deal at a perfect price for great cash flow in the future. The years you may end up wasting, waiting for that “unicorn” perfect deal will mean lost cash flow that you could have been earning.
This is the best advice you could get… with a twist. Buy now, the right way. Whether you pay full price or a discounted price; Property management involves keeping your portfolio in good condition until the market says to sell and capture your capital gains and ensure those rentals properties cash flow in the meantime.
As for return on your investment, the trick here depends on how much of YOUR money is involved in the asset. If I have very little of my own money in the purchase and maintenance of a rental and it is cash flowing at least 15% of my investment back into my pocket every year, I don’t worry too much about how much the house costs.
Wonder when is the best time to buy investment property for Georgia investors? It’s simple, do your due diligence, buy low, and buy now and about all else… KEEP LEARNING about rental investments.