Timing is a hot topic when it comes to real estate investments. Like any asset, the ultimate ideal is to buy low and sell high. Acquiring an income property is a little more nuanced, however. Housing values will fluctuate month over month, possibly even year over year, but they will rise consistently over the long term.
Figuring out the pricing peaks is very challenging, if not impossible. Knowing that, the best time to buy an investment property depends on other factors, such as the ability to generate cash flow and the potential for long-term equity gains. Your decision will also depend on the type of property itself. In this post, we’ll dive a little deeper into what you should be looking for – and when.
Acquiring a Student Rental
Guelph is well known as a university town, and a flood of students arrive each year looking for a place to rent for the duration of their studies. The high demand and low supply of available rental units are also attractive to many real estate investors.
Technically, the best time to buy any investment property is when you can get it at a price where you have the potential to generate positive cash flow. With the housing shortage, you’ll want to take advantage of every opportunity when it comes up.
That said, January or February are ideal times to buy if you get a chance. This is because student leases typically run from May 1st to April 30th. Investors know to list these properties at the beginning of the year to give buyers enough time to advertise, show the property, and secure leases.
Student rentals provide incredible opportunities for Guelph real estate investors! Learn more in the posts below:
- Benefits of Buying a Student Rental
- Is Buying an Income Property Still Worth It for Small Investors?
- What’s the Fastest Path From Broke Student to Homeowner?
Long Term Rentals
For other rental properties, it comes down to your readiness to purchase and what listings become available. Seasonality isn’t what it once was in real estate, but there is still an ebb and flow to the market. For example, many homeowners are highly motivated to sell in the fall, right through November, so they can get settled in time for the holiday season.
This means autumn is at least a great time for savvy investors to keep their eyes open. In addition, people tend to avoid selling their homes in the winter due to bad weather and the holidays taking up a lot of their time.
The disadvantage of searching in the winter is that there may not be many listings to choose from. Unfortunately, this time of year is notorious for very low inventory, so finding the right property isn’t always possible. However, when one comes up, the seller is often highly motivated as they are facing some sort of deadline.
Spring is also a popular time for investors as it is typically the busiest time of year for new listings, so you have a lot to choose from. The downside is that you’ll also face competition from other buyers who have the same idea.
Looking for more guidance to help make your investment properties successful? The guides below can help:
- How to Generate Passive Income From Your Primary Residence
- A Complete Guide to Real Estate Investing in Guelph
- Five Best Cities in Ontario to Buy Recession-Proof Investment Properties
What to Focus on Instead of Timing
As great as perfect timing can be (when you can get it), there are a lot more factors that go into a successful acquisition. It’s best to focus on what you can control rather than relying on luck. For example, you can work with a real estate team with experience in rentals and investments to target properties that meet specific criteria.
A successful investment property is one in a high-demand area, preferably with low supply, where your monthly income covers your carrying costs. Generating positive cash flow each month is even better. However, you can still make significant equity gains even if you just break even. What you don’t want is to lose money each month, either because you overpaid for the property or overestimated how much tenants would be willing and able to pay.
When you focus on the numbers and know what to look for, you are no longer at the mercy of luck or good timing. Once you have a winning strategy, you can repeat it and continue to expand your portfolio and grow your wealth.
The bottom line is that there are ideal situations, but there isn’t one “best time” to buy real estate. Instead of going with the flow, savvy investors will keep their eyes and ears open so that they are ready to act when the moment is right. A team of top Guelph real estate agents can help you get access to suitable listings the moment they hit the market.
If you’re looking to add to your real estate portfolio, the GoWylde Team has years of experience with investors at all levels. Our friendly and knowledgeable experts are happy to help. Reach out today to info@gowylde.ca or call 519-826-7109 for more information.
