Buying a home during the recession might be a worthwhile investment. If you were already considering a property purchase, historically low mortgage rates and growing rental markets may seem appealing. But if you’re about to make a big purchase, Castle Brokerage wants to help you make the smartest decision for your situation, so we invite you to consider the following home buying tips for the recession-era housing market.
1. Recognize Your Goals
Knowing what you hope to accomplish when house shopping is the first step in a productive home buying experience.
For example, if you’re a first-time buyer, consider your ideal location for today and a few years from now. You’ll also want to think about your future growth – and the maintenance, insurance, and property tax expenses in your new place. This first house guide from PennyMac offers helpful information on navigating all these variables.
As an investor, you’ll need to determine what type of rental you want to own and operate. From a single-family home to a duplex or multiplex, there are plenty of options out there. You may also be interested in purchasing and fixing up a property to earn maximum profits. Or, you might have an Airbnb setup in mind for a profitable vacation rental model.
Outline your goals before heading online to search for property listings, and you’ll feel more confident when it’s time to start touring homes.
2. Put Location at the Top of Your List
Whether you’re living in your new home or are renting it out, the location should be your priority. After all, you can make cosmetic and even structural upgrades to a property over time – but you can never change its proximity to the city or what neighborhood it’s in.
The Spruce also recommends looking beyond the zip code when it comes to house hunting. Contemplate the home site, including its terrain, as well as the neighborhood. After investigating those elements, you can check out the square footage, floorplan, and features.
3. Know Your Market
While many areas of the United States experienced an economic downturn, housing prices didn’t hit rock-bottom everywhere. And in many places, it is still a seller’s market, meaning you may face competition when entering an offer on a property.
Though vacation rentals have dipped in popularity, people are still looking for homes to live in and rent out, notes Market Watch. However, flipping has become less of a priority as the future of the market is unclear.
Exploring comparable properties in your area can offer insight. You may live (or be shopping) in an area where prices are low, and competition is even lower. Either way, knowing what you’re up against is vital before you connect with a lender and start the pre-approval process.
4. Get Your Finances in Order
Another crucial element for recession-era home buying is having your finances in order. Whether you’re liquidating investments to purchase a property or are choosing a mortgage with the most competitive rates, being prepared is essential.
If you’re securing financing, know that your lender will likely require multiple check-ins before your closing date. Banks and mortgage lenders are prioritizing checking credit and income during the recession, which means it is becoming tougher to qualify for a loan. Not to mention, it may be hard to secure those all-time-low rates as well.
Even for investors, it’s important to bring a competitive and solid financial package to the table. Keep in mind that when you make an offer, there may be multiple bids already in – and you want yours to be the most appealing.
Investing in real estate or buying your first home during a recession could be an excellent plan. With so much happening in real estate, however, it’s also prudent to take your time and be strategic. Thanks to these tips, you can feel more confident in your purchasing decision.
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