Don’t believe the hype! This is one of several important factors for successful real estate investing in a seller’s market.
The reality is a seller’s market is one of the hardest times to invest in real estate. However, if you can succeed in this environment it means when the marker is flat of becomes advantageous to buyers it will feel like shooting fish in a barrel.
Successful Real Estate Investing in a Seller’s Market
What represents a good deal?
The first thing you need to figure out is what makes a good deal for you. Not what makes a good deal for your investor buddy or your uncle who is in real estate, but for you.
Are you looking to build cash flow? To park your money in a hard asset as opposed to the stock market? Etc, etc..
You need to be clear on what a deal needs to accomplish for you. This gives you a hard target that prevents you from accepting a deal that doesn’t meet your needs. Trust me, when prices are aggressively rising in a seller’s market it is easy to get caught up in the hype and start chasing.
Don’t get caught up in the hype!
In the end there are deals in nearly every market, some harder to find than others, but if you let your end goal change at the whim of the market you will find yourself in deals that don’t meet your needs – that just makes for a bad investment.
Look elsewhere when need be
This doesn’t just mean look elsewhere geographically. Also look at different property types within your local market.
Is your focus single family homes, but nothing seems to cash flow in your area? How about looking at multi-family units, do they look any better?
After working through the different niches you still find that nothing meets your goals then yes, start looking outside of your area. Can be as simple as starting in cities that are 2 hours away or less or going halfway across the country.
It all depends on your goals and comfort level. I can say, if you do go out of state be sure to vet out good property management because they will be a needed asset for you. You can read more about this in my last post: Tips for Buying Out of State Rentals
Figure our what goal needs to be met for you. Find deals that meet that goal, whether locally, out of town or in different property types and then stick to your plan.
If a market wants to overpay for properties don’t get caught up in the hype. In fact, if you happen to own properties in that market take advantage of it by selling or tapping equity, thus enabling you to get into more deals in other areas or niches.
If you enjoy my rental property investing tips, then you will love the book:
I walk you step-by-step through finding, buying and renting out a property. The book is your personal mentor!