When is the Best Time to Buy an Investment Property?

You’ve probably heard that spring and summer are good times during the year to buy a house. The weather is good and the school year is winding down or already over, so it just makes sense to purchase a new home at that time. But does the same hold true when it’s a rental house? Is there a particular time of year that’s better for purchasing this type of investment property?

The answer is yes, but it depends on some different factors. For starters, there’s simply a larger selection of homes to choose from during the warmer months. More people are selling property during the spring and summer, so you have a much bigger variety, and that’s always a plus.

Another factor is the investment strategy that you plan to use. If you’re flipping the property, or even doing rehab on a buy-and-hold, there are some pros and cons about purchasing during the warmer months. The pro is that pleasant weather means that there are fewer weather-related barriers to getting work done. Days are longer, too, so anything you’ve got going outside is likely to be completed sooner as well. However, these are the months when most people are rehabbing/moving, so expect costs for labor and materials to be slightly higher. It may also be more difficult to get contractors scheduled in a timely manner, as they are likely pretty booked.

Now, if you’re using an investment strategy that involves a turnkey team, then time of year doesn’t really matter. The turnkey group has already taken care of the rehab, the marketing, and tenant procurement. All you’re responsible for is purchasing the property, and you can do that at any time of year and not expect a significant fluctuation in your expenses. Of course, market changes can cause variations in list prices, interest rates, and other costs, so you should always pay attention to market trends and act when the time is right.

There is another timing issue to think about, and that is when you want to start marketing your unit and what month the lease will ultimately expire. Again, if you’re going the turnkey route, this shouldn’t be something you’re dwelling on. The turnkey company has already found your renters and is handling the lease agreement. Sure, you can ask for a lease expiry in spring/summer, but it shouldn’t be a dealbreaker for you if it doesn’t happen.

If you’re handling your own tenant procurement, keep in mind that most renters aren’t out in droves looking for a place during the winter. December, January, and February are typically slow months for new lease signings, and obviously you want to time your marketing efforts to coincide when demand is higher.

Ultimately, time of year shouldn’t be a huge factor in your investment decisions. Spring and summer are typically better months overall to purchase a rental property, but if a fabulous deal appears in January during an ice storm, are you really going to pass it up simply because some say it’s the “wrong” time of year to buy? No, you’re not, because that would be stupid. Just remember that seasonality does matter in some situations, so be sure to consider how your timing might affect your costs and profits.