You have likely heard that the real estate market heats up along with the weather during the summer months. There are more properties on the market, and there are more potential buyers looking to complete transactions. Buying and selling between June and August may be a smart strategy for some real estate investors; however, when it comes to flipping houses, you may want to consider an alternative approach. You may be surprised to learn that the best month of the entire year to fix and flip a property is actually December. Intrigued? When it comes to real estate investing in general, you will quickly find out that you sometimes need to think and buy differently in order to be successful—this is a prime example of how being open to new strategies can play to your advantage. Read on to find out why the winter season is actually perfect for house flippers.
Getting Ahead of the Game
Rehab projects that you begin in the winter months should—barring any unforeseen complications—be ready by May or June, meaning that you will have a freshly renovated property to put on the market right on time for peak selling season. You can typically score a great price for a fix-and-flip property in the real estate “off-season” in December, get right to work on the necessary upgrades, and then sell the property at an optimal price point in the summer. Using the money you saved by buying low, you now have more money built into your budget to either devote to more rehab projects to further increase the eventual resale price or to save as a safety blanket in case it takes a little longer to resell the flip than you had originally planned.
Buy Low, Sell High
As previously mentioned, you have a great chance of finding potential fix-and-flip properties priced well below market value in the winter months. Sellers realize that it is more challenging to find potential homebuyers when market demand wanes following its summer peak, but in certain situations, they are unable to afford to wait until the market ramps back up again to list their property. A seller may urgently need to offload the property for a whole host of reasons such as new employment, the death of a family member leaving an unwanted house behind, or a lost job leaving no financial resources in the budget to make monthly mortgage payments. Sellers simply can’t control these situations, which can take place at any point in the year. In a lagging winter real estate market, sellers may lower their list price or be more willing to consider lower offers. This is the ideal scenario from an investment perspective, as buyers can add properties to their portfolio at a price that maximizes their return on investment down the road.
Get a Leg Up on Competitors
For a significant percentage of individuals, work demands to slow down during the holiday period and then pick back up again at the start of the year. You will find that the majority of your fellow house flippers that you are competing with will similarly slack off during the winter. Some will take a break because they have the financial cushion to do so, and others will ease off because they don’t realize the distinct advantage of flipping houses in the market downtime. But now you know better. With other buyers less interested and the competition resting on their laurels, it’s the ideal time for you to be proactive and snap up the best deals that would typically require you to beat out several competing offers. Especially for new investors, being active in the property acquisition game during the winter can help get your new venture off the ground and set you up for success when the market picks back up.
What You Need to Know This Winter About Your Next Fix and Flip | Gauntlet Funding – Melville, NY