It would be fair to say that there is never a bad time to buy investment real estate.  Investors can prosper in any type of market.  High sales prices also means higher rents, tight mortgage markets mean more renters.  If there is a hitch with residential real estate, then a savvy investor may turn to commercial property.  However, today I’m going to get a little more specific in terms of the right time of the year to buy residential investment real estate. 

Many successful investors begin with a niche.  Your investment portfolio will likely grow and diversify over time, but a targeted approach is more likely to yield successful results.  Along those lines, you should become an expert in the types of properties you are investing in.  Part of that expertise is knowing the rent cycles.  When can you find tenants to fill your vacancies? 

You may have a more difficult time filling a vacancy for a property in December if the home is located in an area with mostly families.  The typical family will not be looking for a home to rent so close to Christmas.  This parallels the real estate sales market in that December is typically a slower sales month.  This should be a factor when you are deciding when to buy rental property. 

Take for example a college rental property that is vacant.  If you purchase this property in March then it is reasonable to believe that you will not have college tenants in there until July or August.  You might rent the property to non-college students, but then you encounter the same issue when that lease ends next March.  In this case you would be wise to structure a lease that ends the following June or July, i.e. a 15 or 16 month lease.  Do not get handcuffed with a 12 month lease.

When I have purchased vacant investment property near our local university during an “off” month in terms of finding college tenants, I have structured leases for much shorter periods than 12 months in order to bring my leasing cycle in line with the typical college student. 

It is imperative that you consider these timing issues when purchasing rental property.  You do not want to begin your investing career with several months of vacancy due to poor planning.  If the property is already leased then make sure you review the leases BEFORE going under contract.  Month to month leases may need to be converted depending on the situation.  Evaluate each property and the rent cycle carefully to prevent a visit from the grim reaper of real estate…Vacancy.

For additional insight to when, why, or how to buy residential rental property, contact The Hourigan Team today.