Benefits of buying during winter/off-season
Member since 2018 · 2 posts · 1 vote
Benefits of buying during winter/off-season
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Real Estate Coach · Appleton, WI · Member since 2018 · 66 posts · 61 votes
7yI agree with Daniel. However, that is likely only going to be the case with bank properties and motivated/distressed sellers. Sellers who have a vacancy during this time of year become more motivated for sure! That being said, as we turn the calendar and move into January, prices are generally strong. I've been working in this area for over a decade and live 15 minutes from Green Bay. As an investor, I like to pick up properties from motivated sellers in the month of December, but as a Realtor, I find my biggest month every year is February! I find that in our area, the slowest months for sales (and deeper discounts) are in the summer when all the buyers are out playing and enjoying vacation while their kids are off school. The buyers come out strong and buy everything up in late January thru end of March (believe it or not...I have years of numbers to prove it!). BUT, buying a duplex is a bit different since the motivation of the seller is a lot different than an owner/occupant of a single family home...if they are vacant in the winter, and they're a tired landlord, they will just want to get it gone.
All that being said, if you don't like the property you have your eye on, it's ok to wait for the right one. After all, you'll be living there. If the numbers work, and you're comfortable calling it home, then make your offer and see what you can get it for. Don't just buy it because of the season...you said you're not in a hurry. If you can wait and watch the spring market for a better fit, you'll likely be able to secure a nice deal. Everyone thinks listing in the spring is the way to go, but I find every year that the best time to actually sell is the first quarter. By the time Memorial Day rolls around, most buyers have already purchased something and are off in their vacation mode.
My 2 cents...for what it's worth.
6 Replies
- Investor · Luxemburg, WI · Member since 2015 · 40 posts · 15 votes7y
I have been told by my realtor that Dec is often a good time, especially for distressed properties b/c the banks would like to get that last bit of profit (or cull bad liabilities) before they close the books on the year. Also, fewer people are looking during that time of the year so the competition can be less. Others with more experience should opine as well.
- Real Estate Coach · Appleton, WI · Member since 2018 · 66 posts · 61 votes7y
I agree with Daniel. However, that is likely only going to be the case with bank properties and motivated/distressed sellers. Sellers who have a vacancy during this time of year become more motivated for sure! That being said, as we turn the calendar and move into January, prices are generally strong. I've been working in this area for over a decade and live 15 minutes from Green Bay. As an investor, I like to pick up properties from motivated sellers in the month of December, but as a Realtor, I find my biggest month every year is February! I find that in our area, the slowest months for sales (and deeper discounts) are in the summer when all the buyers are out playing and enjoying vacation while their kids are off school. The buyers come out strong and buy everything up in late January thru end of March (believe it or not...I have years of numbers to prove it!). BUT, buying a duplex is a bit different since the motivation of the seller is a lot different than an owner/occupant of a single family home...if they are vacant in the winter, and they're a tired landlord, they will just want to get it gone.
All that being said, if you don't like the property you have your eye on, it's ok to wait for the right one. After all, you'll be living there. If the numbers work, and you're comfortable calling it home, then make your offer and see what you can get it for. Don't just buy it because of the season...you said you're not in a hurry. If you can wait and watch the spring market for a better fit, you'll likely be able to secure a nice deal. Everyone thinks listing in the spring is the way to go, but I find every year that the best time to actually sell is the first quarter. By the time Memorial Day rolls around, most buyers have already purchased something and are off in their vacation mode.
My 2 cents...for what it's worth.
- Blue Springs, MO · Member since 2014 · 353 posts · 52 votes7y
I just bought an 8 unit, close in a month or so. Some guy and his wife are retiring and sailing off into the sunset (its cold and they wanna get to warmer area, so the late season sell was best for them). Logic would dictate that demand is a little down around the end of the year...taxes due, Christmas expenses, and bills just seem to come out of the woodwork around this time.
I also bought a duplex about this time a few years ago, poor property management and it had to get liquidated.
Im a big fan of buying at this time, that being said, a deal is a deal.
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes7y
Less competition in the winter, but also less inventory. Spring has more inventory, but more competition. Everything in life is a trade off.
District Invest Group545 Reviews - Rental Property Investor · Green Bay Area · Member since 2018 · 7 posts · 4 votes7y
@Jacob Klee, are you planning on doing renovations to either side of the duplex? Or are you hoping to rent it out right away? Only reason I ask is because while it's certainly possible to find a tenant this time of year, it's definitely more challenging than in April - September. The small savings you might see for buying now could easily be offset with vacancy expense (which is easy to overlook for new investors). If the unit did sit vacant, you're not only losing the rental income for those months, but you'd also be paying to heat the vacant side (as well as other costs if there is a separate water meter, trash collection, etc). In my experience, it's easy to become a little more lenient in selecting a tenant when there are fewer prospects... which, when it's the case of sharing a wall with a tenant, I would want to more selective of who I'm having sign on the dotted line. That said, I just bought a single-family rental two weeks ago and had great tenants move in the day of closing! I suppose it boils down to if you're willing to chance it or not. Worst case scenario - you have a few months of vacancy. If you'll be financing the property, it looks like the Feds will be raising rates once more before the year is out, so it might not be a bad idea to pull the trigger sooner rather than later. Not sure any of this helps, but I thought I'd offer my two cents! :)
Kyle Pockat, CPA
- Member since 2018 · 2 posts · 1 vote7y
Really appreciate your 2 cents actually, and it will probably come in handy down the road. Lowering your standards to get tenants would definitely be a problem. My mom will actually be living in The other half of the duplex, so we will not have to worry about finding a renter, of course mixing family and business is always a risk, but hopefully won't be an issue.
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