Should I buy now or wait?

Question

Hey everyone, I've recently started my journey for purchasing a property about a month ago and have been fine-tuning what I'm looking for during this time but, I am hearing mixed opinions on whether I should buy now in the Phoenix area or wait it out about six months to a year considering everything that's going on. My plan is to purchase a rental property, whether it be SFR or MF.

What are your opinions and why?

Account Closed · Answer

Hi Stephan,Congratulations on taking the first steps towards purchasing a property! My two cents would be look for a deal and be picky about what you want to look for (SFR or MF). Don’t worry about what the market is doing to start investing. Let the deal and what you want to invest in guide you.Do you want a value-add / fixer upper? Turnkey? SF or MF? Decide the type of investment you want and then zero in on finding a deal that makes financial sense.Whatever you decide to do, I wouldn’t wait for the market to potentially ‘get better’; especially if you find a great deal.Good luck!

Theresa Harris · Answer

If you are buying a long term rental, buy when you find one where the numbers work. No one knows what will happen down the road, prices could go up, they could go down. You are in it for the long haul.

Cortney Jones · Answer

If you read any housing information about the Phoenix market you will see that there is an expected shortage in our market for several years. That combined with the continued job growth and number of people moving here all point to a buy signal. That being said, it is very difficult to "time" the real estate market. If you are a buy and hold investor then what matters more than anything is the monthly cash flow. Do the numbers work for you? Be sure to include 10% vacancy even though our vacancy rates are much lower right now, you always want to be prepared for a downturn. Also, take into consideration capex money. You DO need to save a portion of monthly cash flow for roof, a/c, water heater, etc. In my opinion, it's always a good time to buy! Some times are definitely better than others, but the true value that buy and hold brings never goes away. (someone else is paying down your mortgage and you're getting a tax deduction) :-)

Aaron Lietz · Answer

Hi Stephan, I actually only agree that it will take a long time to find the right deal (if you are buying retail), but I don't buy retail. I focus on off market deals and use private/hard money to buy them cash and then BRRRR or use another exit strategy. For my investing preferences I learned a while ago that I wanted cashflow and instant equity (all while not having to compete with the public/retail buyers who shop the MLS).

Stephan Khamis · Answer

I appreciate you all taking the time to give me your two-cents. You've given me the confidence and patience in searching for what makes sense for me.

Account Closed · Answer

@Stephan Khamis we are at RECORD low supply right now with single family permits trailing demand for the foreseeable future. My feeling is that it is a good time to buy. If you need some insights about the local market give me a holler.

Austin G. · Answer

@Stephan KhamisGreetings Stephen,I would try finding your deal now rather than waiting for later. Seen a lot of data on the growth of Phoenix. Think the prices are only going to rise in the forseable future. Sort of kicking myself for waiting so long to decide, but I'm in the same boat. Best of luck!-DAG

David Avery · Answer

Stephan, certain city's and pockets in the Phoenix area's have jumped $30,000 in the past 100 days due to all the mentions of above post. This is a up and coming economy and place to live ,and has over 320 people a day moving in then leaving. If you wait to purchase anything, don't delay.If it has need of any work or re hab I know someone that is real estate savvy to get the numbers for you. Find a great agent and go get it!

Steve Morris · Answer

You should wait until you find exactly what you want - It'll be a while.Seriously, figure out what makes a good deal and then sort the metrics by priority to you (like paying extra for a better location/condition) and then you need to leap on stuff once you see deals out there and understand the market.

Jon McCarron · Answer

Hi @Stephan KhamisLike a few others have said, I think you look for a property where the numbers work. Most likely, if financing a 1-4 unit, you will have a fixed mortgage. You would have to research on what other expenses items might be. But if in the case housing prices decline, your rents should be able to carry you forward. I would suggest going with a multi family for scalability. Unfortunately, I am out of my element specifically to Phoenix market, but I would also add that you should just be stashing away cash while you look, never know when an opportunity could present it self.Good luck!