As of February, 2023, indications are looking positive for property investors.
First of all, understand that there is never a good time to buy real estate for everyone. Investors who have years of experience investing usually have the most success finding the best deals. But due to the low mortgage rates which caused a wave of buyer competition for a limited number of properties for sale, it diminished the possibility of finding a property that would result in profit.
The encouraging news is that rates are rising and the market is slowly shifting, indicating more opportunities ahead for investors as of February, 2023.
Some of the reasons that indicate things are shaping up for buying rental property in 2023 include the following:
- There are many people who are afraid to buy (or simply can’t buy) due to higher rates and prices right now, so they must rent to have a place to live.
- Because there are fewer places available for rent, rentals have been on the rise.
- In their plan to “reset” the real estate market, The Federal Reserve has been actively trying to increase the number of houses for sale by raising interest rates, which should provide more options.
- Although a large number of homeowners are in good financial shape with equity in their home, staying put rather than selling in the shifting market, there are some homeowners who will need to sell. People who are negatively impacted by the economy might be in a position to sell their property immediately.
- While there will likely be more opportunities to buy a rental property, they will not just show up on your doorstep.
Keep these things in mind to help you make the most of the fluctuating market:
- Line up your finances. Set a budget for what you can spend on the property. If you need a loan, get pre-approved for a mortgage by a lender so you will know how much you have to work with. If you’re paying cash, set a limit on how much you’re able to spend.
- Know the kind of property you want. Do you want a single-family rental, duplex, or condo? Decide what appeals most to you and what you can best manage.
- Decide on the location you want. Where is your ideal location? Do you want a property nearby, or one located in another city?
- Be prepared to wait; but be ready to act. A property may have a price reduction, but that doesn’t mean it’s necessarily a good deal. Finding properties that will produce good cash flow and ROI takes time, so be patient. Be ready if you do find one below market value or near enough to negotiate and don’t waver; make a deal before someone else grabs it first.
Although the last few years have not been the best for investment properties, 2023 looks more promising. If you find that you have questions about investment or rental properties, contact Cousin James Management. Our family-owned and operated business has been working with North Texas property investors for more than 25 years and we have the licensed real estate experts to answer all your questions.
If you’re ready to put a rental property on the market but want to be sure you’ve covered all your bases, the Cousin James Management free Checklist for Property Owners is helpful.