Are the Holidays A Good Time to Buy A Property?
With the holidays upon us, is it a good time to buy properties? In this short episode, we talk about a few benefits, risks and considerations about buying right now. --- Transcript Michael: Hey everybody welcome to another episode of The Real Estate Investor. My name is Michael Albaum and today I'm joined by my co hosts Emil: Emil Shour Tom: Tom Schneider Pierre: Pierre Carrillo Michael: And today we're gonna be tackling whether or not the holidays can present a good or bad time to buy real estate. So let's jump into it. Michael: So guys, we just passed Thanksgiving today reporting this the first of December about to approach the full fledge holiday season. is now a good time to buy. yea or nay everything in between. Emil, what are your thoughts? Emil: Hell, yeah. Right. now's a good time to buy. People or your competition, ie other buyers, sleeping, getting ready for the holidays. I think just overall you have less competition during this time of year. I think it's been proven through stats most you know you get the best deals December January timeframe typically. So I think if you're in a position to buy right now is a great time I am active. I mean, I think you should always be active but I think December January can be a great time to snag property. Michael: Right on. Tom? Tom: Tryptophane. Is that what's in turkey? and red wine? Michael: Yeah! Tom: Sluggish. Yeah, tastes like opportunity. But what I do is I get tryptophane free turkey and then I just hit the market. Getting the jump on everybody else. Yeah, get the jump on everyone. I would say it's, it is as good a day as any day to do buying. So you know, stick to your process, building your buy box analyzing properties. And I would try not to have too big of gotta buy now glasses or don't gotta buy now glasses. Just let the market speak. Let your work, speak and finding property. So I guess not a very specific answer. But it would be my honest answer is continue to your work and analyzing properties. Michael: Always let your spirit guide? Tom: Yeah, let you're conscious… you can do it. Pierre: For a little bit of balance here, what would be some of the risks about going into the market now finding a tenant in January? Is that something that we should be considering? Michael: Yeah, absolutely. I think finding a tenant is definitely tougher in the winter, in the vast majority of markets. And I would say talk to a property manager about what the stuffs look like, at this point in this time of the year, because they're going to have a better idea than anybody else. Because let's be real, there are leases that are expiring around this time of the year. There's only 12 months in a year. So there's always new lease expiring. So whether or not people are looking to move is a whole nother issue. But the opportunity, I think is absolutely there. But it's definitely market specific. Tom: Great point, Pierre. Two things that I would make on that point, is related to a lease, if you do end up buying and then getting a lease, I would recommend trying to make it like an 18 month lease so that the end of the lease is hitting an a more desirable time period of when people are moving in and out not to have a 12 month lease. So it just hits directly back into the winter, which is not ideal. The other aspect of buying in the winter is that you're buying in an area that deals with a lot of snow, perhaps you're buying in Pittsburgh, it transactions can be slow, just because doing inspections can sometimes not be practical, because the inspector can't get to the roof to inspect stuff. So there is some additional challenges that is presented during the winter. But don't let that get in your way of avoiding tryptophane and doing the hard work. So great point here. Pierre: And also more specific to this time in history, or you know, this specific moment that we are going through a new president coming in, a little bit of economic uncertainty, what are some considerations that we should be taking in mind moving into an acquisition now? Michael: I think to only kind of double down on Tom's point with the slowness of acquisitions, this time of year, people are taking vacation, people are doing all kinds of stuff. So just the whole process can be slow as molasses, in addition to the fact that we have all this economic uncertainty and interest rates are so low, so many people are doing the finances, but it just seems like the whole system is kind of log jammed with stuff, whether that's transactions, whether it's wi fi's or purchases. So just be aware that it might take longer, and especially with COVID, like Tom was saying with inspections and with appraisals, just stuff is taking longer. So I would just plan for that and kind of have that in the back of your mind. And think about maybe writing that into your purchase and sale agreement, giving yourself some extension timelines and extension windows, if needed. Because the process is just taking longer than expected. Tom: I think on the aspect of financial uncertainty, I would just make sure that you're not overextending yourself so that you have the proper reserves, the property is vacant for a little bit you have reserves to handle a month or two that if you're using financing, that that financing cost is not going to be too big of a burden on yourself. So I think just practicing good discipline around what your available buying power is. and kind of just generally speaking like I have, yeah, there's a little bit of there's some economic uncertainty, but I think that for the most part, the government does a good job of steering the ship where it needs to be steered if there are issues for better or worse here. You know, we are in to like some major economic issue that comes up and it could be a reasonably safe assumption that there's going to be some additional stimulus support. Tom: That was episode everybody. Thanks so much for listening. If you'd like this episode, feel free to give us a rating review and subscribe where it is a new podcast. We look forward to seeing on the next one and happy investing