2024 Housing Market Predictions: Why You Should Invest
The question on every real estate investor’s mind is why you should invest in 2024 with the higher interest rates. There are a few things that people need to consider before investing in this market. This includes shopping wisely, evaluating repair costs, current interest rates, property location, and funding. By considering all of the factors before jumping in, real estate investors can increase their cash flow for future investments.
Let’s take a closer look at the three things real estate investors need to consider when purchasing a property
First, Focus on the Lower End of the Market
Since interest rates are high, you should probably focus on the lower end of the market. This includes homes that are in the $300K range and below. Affordability will be a factor when you’re flipping, because someone has to be able to afford to buy the property once repairs are completed. Thankfully, we have a good inventory shortage as investors, which in turn is creating a greater demand. Therefore, if you have a good price point and a good product, then it’s going to sell quickly.
Second, Create a Product that People will want to Buy
Especially since you will be the one fixing up the property, it is important that you create a property people will want to buy. As real estate investors, it is crucial that you complete repairs both quickly and correctly in order to maximize your investment. By creating a nice fixed up property in this market, you will have an advantage over those who are not putting in the effort.
Third, Consider the Impact that Interest Rates will have on your investment.
Interest rates will be a major factor when purchasing a property in this current market. However, if you can find a rental property that can break even, or better yet one that can make a little money, you should invest now to generate cash flow quickly. Interest rates should go down in the next 18 months to 2 years. When they do, you will be able to refinance and come out ahead of everyone who has been sitting on the sidelines.
Now is the time to jump in! Let’s take a look at how the market has changed and what you should avoid as you move forward.
How has the market changed?
It is the perfect time to jump in if you can buy something low. As long as you do it correctly, you should invest now while everyone is running away! Then when rates go back down, you will be able to create wealth for future investments. A few years ago many people were buying properties for $100K over asking price. In today’s market they would be able to sell it for maybe $250K. Since they overpaid on the property a few years ago, they are now upside down on their investment. Don’t let this happen to you! As a new buyer, make sure you are purchasing it at a good number while the market is down. Over time you are going to win the game by buying at the right time.
What should you Avoid?
Getting into real estate investing now will get you on the fast track to success. If you are able to buy good properties in good markets, then you will be successful. It is important to avoid properties that are on corners or busy streets. In these times, the best properties are on a culdesac or near local parks. Real estate investors need to research current market trends before jumping in. There are some markets where cities are doing better than suburbs, while others are growing at a faster rate. Another thing to be aware of as a real estate investor is all of the negativity out there, which is driving people out of the market. Instead of following the herd, turn this negativity around so it can benefit you.There are better deals now than there were a few years ago. This is because people are fearful and want to get rid of properties before things get worse. As long as the sellers have that fear, then investors who are level headed can benefit.
Number of Real Estate Investors is Shrinking
There has been a whole generation of real estate investors who have gone through good times with money, banks, and lenders in the past. This was when everyone was trying to give you more money for your investments. However, the Fed is now trying to slow that down. The huge pool has gotten a little bit smaller for those who are trying to qualify for loans. This lending squeeze has resulted in many real estate investors getting out because they don’t have the credit score or income to succeed in this market. In 2024 there will be less real estate investors, less money available for funding projects, but more deals available for the driven investor.
Now is the time you should invest in real estate properties! By strategically selecting properties, investors have the opportunity to grow their wealth when rates drop. If you are coming in as a new investor, it is important to make sure that you are set yourself up for success. By increasing the amount of money you bring in, and filling your liquidity buckets, you will stand out to lenders. Real estate investing is all about using other people’s money to create wealth with a little bit of your own money. By considering all of the factors and creating a plan, real estate investors will have the potential to increase their cash flow for future investments.
Watch our most recent video to find out more about investing in today’s market.
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