Just a few short years ago, the housing market in America was perfect for investors. Prices were down, buyers were desperate, and banks had just started to offer loans again. It was the right mix of conditions for success as a real estate investor. However, recent months have shown a pretty significant rise in property process, and the fast-paced home foreclosure rate has started to decrease.
What this means is that investors are suddenly faced with a market that isn’t quite so friendly as it once was. With that in mind, many young investors want to know if it’s even still possible to find good deals on properties with the prices of homes rising. The short answer is yes, but there are a few things to keep in mind.
Less Inventory Means Deals Are Scarce
Most savvy real estate investors right now are looking to areas like Houston, where the job market is booming and young professionals are flocking. But the problem is that, despite the sudden increase in demand, the production isn’t keeping up. New construction still isn’t feasible for many developers, and with foreclosures down, there are fewer available homes to snap up for good prices.
This does, however, mean good things for sellers who can manage to find those available homes. A high demand and a low production means that homes don’t stay on the market for long. If you do find an available home to invest in in these areas, even if it’s not the best deal, you can almost universally count on being able to sell at a tidy profit.
How to Find Deals
Even though relying on “deals” isn’t the best investment strategy, as demonstrated in the example above, it can still be a priority for many. So here are some good ways to find real estate deals even with the home prices are high:
- Buy occupied properties. Most of the time, properties that come with tenants are lower in price to offset the challenges of dealing with an old lease and an old tenant. It’s still potentially a great, low-maintenance deal for you.
- Get into flipping. If you’ve never rehabbed a house before, but you’re after the best deal you can get, now may be the time. If you can find a moderately priced home that is a bit dated, but otherwise structurally sound, it won’t take much to give it a contemporary face lift and then resell for a profit.
- Have cash in hand. If you want the best deal you can possibly get in a high-priced market, one of the best things you can do is either have cash ready to go, or have your financing already set up. Motivated sellers who just want money now will always take the fastest and easiest offer they can get.
- Up your game. Now is the time to put in the extra hours and to stay vigilant for good deals. While investing may have been a part-time gig or a hobby for you up till now, if you truly want to succeed in this market, you’ll need to invest some time so that you can be there when luck hands you a great deal. Get rid of hesitation and learn to read a property very quickly. Focus on protecting your reputation while you make fast decisions.
Redefine Your Sense of “Good Deals”
Finally, in this market, you may have to do a little refocusing on what is truly a good deal for your life and objectives. If you value the extra time that real estate marketing can give you over a desk job, and can manage a tighter budget for a while, then a good deal might simply be the easiest property to sell, rather than the cheapest property to buy. Remember that only you define what success is in your portfolio, based on your values and personal goals.