Just because the market has been slower lately does not mean that it is not a good time to invest. Authors Wendy Patton and Justin Ryan argue that “more money has always been made in a down market than in an up market.” In their book, Making Hard Cash in a Soft Real Estate Market Patton and Ryan highlight important ways to use this market to your advantage. The following are 5 tips from the book that offer some insight into the opportunities a slower market brings investors.
1. Timing is Everything:
Enter the market early because there are so many good buys, opportunities to
negotiate price, and lower interest rates.
2. Get Financially Ready:
Make sure to calculate all the costs involved with investments such as holding costs and taxes. Have a reserve and keep in mind your risk level such as whether you flipping for a quick profit or holding on to the property to make a larger return in the long run.
3. Buy and Hold:
Property generally appreciates over time. When you are able to buy for the right price in a slow market and hold on to a property you may reap many benefits in the long run. There is always an option to lease a property to cover some costs before selling.
4. Find the Best Deal:
Right now there are great deals in West Michigan. Foreclosures and builders who have unsold properties offer investors the opportunity to buy for next to nothing. So many sellers are advertising incentives such as offering to pay closing costs as well.
5. Have an Exit Strategy:
Have a strategy to sell those properties and hire an experienced Realtor who assists you with putting together a plan to sell when it’s time. A good selling plan will help sell a property faster and for more money. Patton and Ryan advise “know how you will get out before you get in.”
From the book: Making Hard Cash in a Soft Real Estate Market, by Wendy Patton and Justin Ryan and realtor.org
