There’s a lot that goes into successful real estate investing. Things like the location of the property, the potential value versus the asking price, the amount of work you’ll need to do, and even the time of year you plan to sell the house can all make a huge difference in your profitability. Here, you can take a look at some of the most common questions investors have regarding fix-and-flip project profitability during the winter months.
Should You Buy in Winter?
The first question many investors ask is whether they should even look at properties in the wintertime, especially in the northern states where winters can be dreadfully cold and snowy. To answer this question, the most important factor will be the asking price versus the value. It’s true that fewer people tend to move during the winter months due to inclement weather and cold, but this may actually be good news for investors.
When homes spend a long time on the market, the sellers start to drop the price just to see the property sell. This is usually most evident in the winter because fewer people are buying and moving. As such, if you see a fantastic deal on a house that is priced low enough to allow you to do the required renovations and then sell it for a profit, it’s worth buying. Just think of the months’ worth of payments you’ll be making while you renovate and sell.
Can You Renovate in Winter?
In Minnesota and the surrounding states, winters can be extremely harsh. Nevertheless, if you buy an investment property in the dead of winter, there are plenty of renovations you can do immediately. First, ensure you have power to the home, and then focus your attention on the inside. You can completely remodel kitchens, bathrooms – the entire house – no matter what the weather is like outdoors. In fact, contractors will likely be grateful for the opportunity since the winter months are dreadfully slow for them.
Though you may be able to complete some outdoor renovations, such as installing replacement windows, others may need to wait until warmer weather for safety reasons. If this is the case, be sure you estimate the cost and time requirements involved in later renovations before you buy.
Can You Sell in Winter?
There’s no denying that fewer people are interested in moving during the winter months, but that doesn’t mean you can’t sell a great property until spring rolls around. In fact, it’s important to consider who is most likely to buy a property in the dead of winter and then carry out your investments accordingly. For example, one group of buyers will likely consist of individuals and couples who plan to use their tax refunds as a down payment, and others may receive down payment funding as a holiday gift.
While it’s normal for fewer properties to sell in the winter months in northern states, it’s still absolutely possible to sell them. As always, be sure that you target the most valuable renovations and price the home in a way that provides the buyer with a great value but still allows you to turn a profit.
Though winters can be harsh, cold, and downright miserable in many parts of the nation, the world doesn’t stop for anyone, and people will still need to buy homes. Though your fix-and-flip projects may be slower through the winter, that doesn’t mean you can’t profit from them at all.