Like many markets, the supply and demand in the real estate market can be influenced by the time of year. In the summer, investors typically see high demand for purchasing properties. But just because the colder winter months have less demand that doesn’t mean you can’t plan for the following year; here’s 7 reasons to finance a fix and flip this winter.
Less Competition from Home Buyers
Typically, most homeowners do not have enough liquid cash available to relocate during the winter season. Instead, cash is likely spent on travel and holiday presents; not major moves like purchasing a new home. Because of this, you can leverage these trends in your investment strategy and experience less buying competition from homeowners during the winter months.
Less Competition from Other Flippers- including Newbies
The winter months are a time for relaxation for many investors, given the stress of the holidays can often be a financial obstacle to one’s investment strategy. Investors who prefer to not work around the holidays are not interested in acquiring a new fix and flip anytime soon, giving you the perfect excuse to get your chunk of the market. Less competition from other flippers means more opportunities for you. The winter months can also give you a safe haven from competitive newbie investors.
Great Opportunities Can Open Up Any Time of Year
Just because it’s winter it doesn’t mean you’re limited to buying opportunities. During all times of the year, opportunities in the market pop up due to inherited houses, repossessions, or job relocations. When these events occur in the winter months, they are less likely to be approached by a pool of buyers. In addition, sellers who have been on the market for a lengthy amount of time are more open to negotiations before the year ends.
Potential Lower Labor and Material Costs
During winter, the demand for labor and material tends to slow down, giving you the opportunity for more competitive rates in the market. Independents who handle demo, cleanup, and landscaping need work during the cold, winter months. There is potential to experience lower labor and material costs in winter due to the low demand for these professionals, something you should consider in your investment’s strategy.
Buy Low, Sell High
You have a much greater chance to find a fix and flip priced below market value in the winter months since there is less demand. Every savvy investor knows that sellers may lower their list price or be more willing to negotiate due to the waning housing demand of winter, making for a buyer’s market. This scenario is ideal from an investor’s viewpoint, as you can acquire properties for less and maximize your return-on-investment down the road.
Ready by Peak Selling Season
When you start a rehab project in the winter, that means your property should be ready to put back on the market by spring or summer, the most popular and in demand time for prospects to purchase properties. Expert house flippers know to snag an off-market deal and use it to their advantage later on in the year. Buying low in the off season and selling for full price during the seller’s market of summer makes for a great opportunity for investors who want to maximize their returns.
RCN Capital offers short-term and long-term financing options for real estate investors. Whether you are looking to fix & flip properties or hold properties for rental income, RCN has flexible options that are suited to your needs.Connect with us todayto discuss your next real estate investment.