Seasonal Real Estate Strategy, Explained
Many people think of fall and winter as the “off-season” for real estate investing. While partially grounded in truth, this mindset is often misguided and can lead you to miss out on investment opportunities and growth… In my own business, the fall and winter are busier than ever! I do, however, advocate a seasonal approach to your real estate investing strategy. Or at least, keep the following notes about seasonal real estate investing in mind as you map out your goals for the year ahead.
Fall & Winter Real Estate Investing Strategy
As a seller in the fall and winter, you will find that the “just for fun” buyers are not going to open houses in droves like they are in the summer. As a result, you can expect more serious buyers during these seasons. If you are selling a home during this time of year, keep in mind that fall and winter buyers are not as deadline-driven as spring and summer buyers. Families moving in the spring and summer often need to be in their new home before school starts in order to have their kids start the school year in the right district. While cold season buyers might have a deadline in mind (move in by Thanksgiving), they are more likely to be flexible with their timeline. In general, as an investor, we usually see fewer leads from sellers in the winter, but the leads we do get are higher quality.
As a buyer, you can usually expect lower prices during the fall and winter. Of course, this is dependent on your local market cycle – and not a guarantee! When a market is popular, there is no seasonal price difference. If prices hold steady, however, you can still benefit from reduced competition. Prices drop the most during the winter in cold climates – and often not at all in very warm climates. Buying a home during the fall and winter puts your at an advantage for potential price savings, decreased competition, and flexibility in your timeline.
Spring & Summer Real Estate Investing Strategy
With the fall and winter trends in mind, it is no surprise that spring and summer are collectively considered a seller’s market! For starters, homes simply look prettier with green grass and blooming bushes. This might seem trivial, but anyone with experience staging a home can tell you that yes, these details make the difference. Since there are more people looking to buy homes during the warmer seasons, you can expect increased competition and higher prices on average.
Additionally, as a seller, you will encounter more deadline-driven home buyers. As I mentioned, home buyers in the spring and summer are more likely to have a school deadline in mind. On the other hand, there are more “just for fun buyers” scoping out homes. A smart real estate investor will weed out unmotivated buyers through a series of targeted questions. Don’t waste your time with someone who is not ready to buy immediately. In fact, make sure your potential buyers are qualified and have an official approval letter. Keep in mind that a pre-approval is not the same!
Unlike a traditional homeowner, a real estate investor is not always restrained by needing to sell before they can buy. As a result, you can take advantage of the market, by buying homes in the winter and selling them in the summer. Knowing the seasonal climate is essential for designing your real estate investing strategy for the year ahead. I coach HomeVestors® business owners on three core real estate investing strategies: wholesaling, rehabbing, and renting. Each strategy has its strengths and weaknesses and can help you achieve a different business goal.
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