Buying Investment Properties in a Seller’s Market
It’s no secret we’ve been in a strong seller’s market the past few years, especially during the pandemic. Home buyer demand is high while housing inventory is low. Inflation and mortgage rates are on the rise, which may help balance out the market. However, we’re probably still a long way from anything resembling a “buyer’s market.”
Tough Buying Conditions
It hasn’t been easy for home buyers and real estate investors. However, the most successful investors know still know how to find the best deals and how to get those deals done. In these market conditions, you have to be more diligent, more resourceful and sometimes more creative to get the most out of your real estate investment opportunities. It can be done. There are many investors doing great in today’s seller’s market conditions!
Have a Plan
The first step to any successful real estate investment business is to have a plan. Your investment plan should be mapped out along with your budget, funding options, renovation resources, marketing campaign and other important factors. You know what the market conditions are and your real estate investment plan should reflect this. Know when, where and how you want to buy houses. Know what you are going to do with those properties after they are purchased (renovations vs. wholesale flips, rental vs. resale, etc.). Know how you will be reinvesting any profits into future investments.
Find Good Investment Opportunities
Next, you have to find the right houses to buy. This is easier said than done in a seller’s market. Housing inventory is scarce and the best houses that do go on the market tend to get a lot of immediate buyer attention. Buyers are making aggressive offers, and most investors aren’t looking to find themselves in a bidding war for any property. You have to dig a little deeper for your houses. You have to find off-market deals and/or foster direct relationships with motivated sellers. You may have to consider less-desirable properties that have been sitting on the market for longer than others. As long as you run thorough property analytics, you can determine if any house is worth your time and money—even those in bad neighborhoods or in really poor condition.
Consider joining a real estate investment network like PropertyLark. We work with experienced home buyers and real estate investors. We provide access to off-market property listings and properly vetted homes that meet our strict analytics criteria. We identify great properties and bring them to you, along with other useful resources that will help you be a more successful real estate investor.
Adjust Your Expectations
We are starting to see more foreclosures and short sales as the pandemic continues and mortgage forbearance options run out. This presents some nice opportunities for investors. At the same time, you will want and need to adjust some of your buying expectations based on the seller’s market. These distressed properties may still attract some buyer competition. You have to be prepared to make more competitive offers when necessary. Profit margins may be thinner or you may have to willing to pass on a purchase if it doesn’t meet your investment plan and budget criteria. Don’t let the market force you to overspend. Be patient and strike when the best opportunities present themselves!
To learn more about the PropertyLark home buying network and to see if you qualify, please fill out the contact form to the right and it will take you to a brief buyer’s questionnaire. Continue to follow our buyer’s blog for more information and tips for buying investment properties in today’s seller’s market.