Is 2023 the Right Time to Buy Real Estate?
Real estate is a game of timing. Often, the most lucrative properties don't appear all that exciting at first glance. Sometimes it takes years for a neighborhood to develop and, in turn, provide a return on your original investment.
When should you buy if you're considering investing in a residential investment property?
Is 2023 the right time? Here's what to consider:
Why 2023 Might Be the Right Time For You to Invest in Real Estate
If you or your business is considering buying a rental property, 2023 may be the time to act. Here's why you should consider investing in the real estate market in 2023:
Rental prices, both residential rent and commercial rent, have been on the rise. Now could be an excellent time to invest in this type of asset class because prices tend not only to go up over time but also increase faster than inflation rates due to supply constraints and other factors like population growth within specific areas such as cities where there are many renters versus homeownership rates being low among millennials and Gen Z, who prefer living in apartments instead due primarily because renting allows them more flexibility than owning.
Evaluate Where You Stand Financially Before Investing
Before you even think about investing in real estate, it's important to understand your specific financial situation. Here are some good places to start:
Know your credit score and ensure it is as high as possible. The higher, the better! This will make securing financing from a mortgage provider easier.
Determine how much money you can afford to pay for a mortgage on an investment with your current obligations. This will help determine what kind of property is within reach for your budget.
Determine how much money you could receive in monthly rent from your potential rental units. Due to long-standing tenants, many turnkey properties have rents set at a lower rate. Could you raise those rates to increase your bottom line at the end of each month?
How Interest Rates are Controlling the Economy and Your Investments
With the overall housing market's downturn since 2022, many wonder what is behind the sudden change. Property values have increased in the past few years, but they're not likely to increase significantly in the coming year across many markets in the United States.
However, suppose you're considering buying an investment property in the second, third, or fourth quarter of 2023. In that case, it might be just what you need to get into the market--and stay there long enough to find a solid investment property. So, how do you find a well-performing investment property?
Finding the Right Investment Property in 2023
While the housing market is currently somewhat stable, despite the apparent lack of inventory, plenty of properties are great investments and can be scooped up at a good price right now.
Working with a well-qualified real estate agent with experience working with other investors is an essential first step in your journey. To buy a rental property, you will need a deep understanding of your local market, current trends, current market prices, and the potential income that could be generated from a real estate investment property.
Understand Your Local Market Before Pushing Ahead with Investing in a Rental Property
The local real estate market is the most important factor to consider when buying a rental property. This is because it greatly impacts how much you can rent your property for, as well as how much it will cost to maintain and repair.
For example, if you buy in an area with fewer tenants available than usual, your rental income will be lower than expected. Or if there's been an increase in crime rates or other negative factors, many potential tenants may decide not to move into the area.
Also, understanding the right time of year to purchase a rental property in your community is key to getting the best deal. Spring and summer are some of the busiest months for new properties hitting the market across much of the United States. In contrast, fall and winter tend to be slower for sellers, enabling you as a buyer to potentially snag a property at a lower cost than during peak buying and selling months. Speaking with your realtor will give you a better idea of your local market.
2023 is the Year to Start Growing Your Real Estate Investment Portfolio and Buy Rental Property
If you're considering buying a rental property, 2023 is the year for you to make it happen if your finances are in order and your local market is seeing favorable conditions.
Real estate is one of the most stable investments and has historically been an excellent way to build wealth, which is essential for your long-term success and lasting legacy.
There are many reasons why now could be an ideal time to invest in real estate: interest rates are still low, unemployment is low, a strong demand for rental property among potential tenants in your area, and you are financially ready to begin investing.
If these factors seem promising enough for you, consider purchasing rental properties so that they'll start generating income for the future, where prices are expected to rise even higher!
The bottom line is that you should know what market you're entering and whether or not it's an excellent time to buy. If you do your research, 2023 could be a great year to purchase real estate because plenty of opportunities are available right now--and they won't last forever!
David Price MD is the Founder and CEO of getFREED, a business providing real estate education and vetting of individual deals to help physicians and other healthcare professionals build a passive stream of income, allowing them to work less and practice on their terms.
David lives with his wife and two daughters in Atlanta, GA, USA.
To find out more about David and getFREED, head to http://www.get-freed.com.
