Thinking About Investment Properties Like Trees


Thinking About Investment Properties Like Trees
By Scott Rogers • February 28, 2023
A (not very well sourced) proverb goes something like this... "The best time to plant a tree was 30 years ago, and the second best time to plant a tree is now." And so it goes with purchasing investment properties. The best time to purchase an investment property was (certainly!) 30 years ago... or 20 years ago... or even 10 years ago! (or in this crazy market, even five years ago) The second best time to purchase an investment property is now. A bit of explanation and plenty of caveats are necessary here... I've had a variety of conversations with real estate investors over the past few months as they have considered various properties that have come on the market for sale. We have lamented (together) that prices have risen so much that it's harder to justify some investment property purchases with today's prices and today's interest rates. On multiple occasions, my clients have said commented that they wish they had bought an investment property (or two... or five) about 5 to 10 years ago. But, as we have reflected further, we have realized that there is not likely going to be a future time when conditions will be more favorable for an investment property purchase. Prices do not seem likely to decline significantly (if at all) and while interest rates may decline some over the next year or two they seem unlikely to decline significantly. As such, if you didn't buy an investment property (or properties) 10 or 20 years ago... but you want to own one in 10 or 20 years, perhaps today is the best time to do so. OK, OK, plenty of caveats... [1] Investment property values do not always increase over all periods of time. I'm not trying to tell you that they do. Investing (in real estate or otherwise) includes risk. [2] You still need to make sure the numbers work from a monthly cash flow perspective, etc. [3] I do recognize that if you buy a property as an investment property it might keep an owner occupant buyer out of the market for buying that same property. This observation is not me telling you that you should not buy the investment property - but just an acknowledgement that any purchasing decision has other follow on consequences. If you're hoping to buy an investment property in the next few years (or this year!) let's chat sooner rather than later to make sure you understand what numbers to expect -- from a purchase price perspective and from a rental income perspective. And then... let's go find you a tree to plant... I mean... an investment property to purchase! Receive Updates by Email Recent Articles: There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell Consider The Cost Of Your Planned Renovations When Planning Your Offer
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 21, 2024 (unless otherwise noted).
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