December… A Time To Capitalize For Investors!
I’m going to air out a BIG secret I’ve only been sharing with my clients..
Here it is….
December is the BEST time to purchase an investment property. Here’s why…
Buyer Activity is LOW… What does this mean? This simply means that there are far fewer buyers looking to purchase a property in December. If I’m acting as your agent to list your property, I am strongly encouraging you to hold off until the spring (March – June) or fall (September – November) months. This is simply because there are more active buyers and more eyes on your property. If I see a property listed in December, my assumption is that the home-owner bought another house during the fall market and now has to sell their existing home to be able to close on their new purchase. When you know someone has to sell, this is leverage in negotiations and if you are ambitious enough to put your heaviest winter jacket on, tie your boots tight and venture into the cold… YOU CAN CAPITALIZE!
Ok so now we understand the resale market is a bit of a funk in December… So what?!
There’s another aspect to why you should buy your investment property in December which doesn’t relate to the sale market… It’s the RENTAL MARKET. This is a factor I watch so many people overlook and it baffles me. When you purchase, you normally have a 1-3 months closing period from the time the APS (Agreement of Purchase and Sale) is executed..
This would bring you into the early spring market, this is when the RENTAL MARKET goes ballistic with multiple offers on rental properties including everything from over-bidding to BLIND OFFERS… On average, a property which rents in December for $2,000 after 3 weeks on market, will rent for $2250 in 3 days on market in April. Lets do the math on that….
250(additional rent for renting in spring) x 12 (months) = $3,000 (additional income year over year for timing the market correctly)
$3,000 yearly in capitalized income over a 25-year mortgage equates to $75,000 some of the investors out there are leaving on the table… Nevermind the $30,000 you could save on your purchase by purchasing in slow season (December)
So that’s it.. Not a long blog, but a useful one for those of you pondering getting into the market but are thinking of hanging up your skates because it’s getting cold outside…