Why Fall Is a Great Time to Invest in Real Estate

Why Fall Is a Great Time to Invest in Real Estate

Most people think the best time to buy a house is in the spring, but there's another even better time to invest in the real estate market: the Fall. Unfortunately, many people don't consider house hunting in the Fall because school starts, the holiday season is around the corner, and it's not a popular time to buy a house.

Here are the top reasons why Fall is a great time to invest in real estate.

Competition

The spring months are when sellers often get the highest price for their homes on the real estate market, but that doesn't necessarily mean it's a good time to buy. Once school starts, fewer buyers are in the market, which means home prices drop, and there are fewer buyers to compete with, making it easier and more affordable to buy a house.

How the Holidays Help

Most buyers don't want to deal with moving during the holiday season. This helps keep the prices down because there's less competition. However, when there is more attention on a home, prices increase because buyers compete and try to outbid one another.

During the holidays, most people aren't thinking about buying a house like they are during the summer rush. This means you might find more motivated sellers willing to negotiate in your favor than you would during a busier time.

Sale and Home Improvement Season

Fall is a time of many discounts, especially in the home improvement industry. If you invest in a home in the Fall that needs fixing up before you can rent it out or sell it for a profit, you might find sales on the materials needed.

Fiscal Year and How This Helps or Hurts Your Taxes

Some homebuyers add to their real estate portfolio for tax breaks at the end of the year. In addition, depending on your tax situation, you might be eligible for certain tax deductions, such as closing costs, discount points, and property taxes on your taxes if you run a real estate business.

Buying a house before the year ends can be a last-ditch effort to lower your tax liability and offset capital gains in other investments or properties you've sold throughout the year. You can also take advantage of the like-kind exchange. If you sell a property but reinvest the funds before the year's end (locating the new property within 45 days of selling the existing property), you can defer the taxes on capital gains.

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Fall Weather Flaw Reveals for Buyers

It's much easier to see a home's issues in the colder months versus the warmer months. You also aren't seeing the home during its peak. For example, there likely aren't any flowers or lush trees. Instead, everything may look dreary, there are fewer people out, and you're more likely to see major issues with the home, such as a furnace that doesn't work well or rooms with drafts. Your real estate agent and a home inspector can be great resources to help you determine if the home has problems before investing.

Mortgage Rates

Mortgage interest rates significantly increased over the last six months, but some experts believe we may see a slight drop in the coming months. As there is less demand for houses and home sales fall, interest rates may fall to make it more enticing and affordable for savvy home shoppers to buy a house.

Housing Market

The market slows down in the cooler months, and prices tend to drop. This isn't the case around the entire country, though. It varies in different areas. Check out the historical selling prices of homes for sale in the summer vs. the Fall, or work with reputable real estate agents who are familiar with the area and know the trends.

Personal Readiness

No matter how low a purchase price or attractive the housing market seems, it's not the right time if you aren't ready to take on a new home, even your dream home.

By the fall months, most real estate investors have figured out their personal finance situation and might be looking for another asset to add to their portfolio. You have the entire year to figure things out, and by the time fall rolls around, you're ready to invest and add to your portfolio.

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