December Brings Christmas Cheer To Investors Purchasing Property
The rush towards the end of year shutdown delivers more than just Christmas cheer - there are often gifts in store for well-prepared investors says property consultant Santosh Nune.
December’s strong focus on fun, family and Christmas cheer takes nearly 80% of the buyers out of the market, placing pressures on agents and vendors keen to close sales. Combined with the holiday mood on banking and financial institutions, smart investors can often buy up to 10% cheaper than other times of the year due to lack of competition. This statistically-proven deep sales trough is critical to investors whose swift action can lead to major gains for their property portfolios when they’re cashed up and ready to buy.
Benefits of the Christmas shutdown
From the middle of December onwards, many businesses slow right down for anywhere up to 4-6 weeks, taking much-needed momentum out of the market. From banking institutions to conveyancing firms and real estate agencies, there’s a rush to dispose of as many properties as possible before the end of the year. Keeping a property for longer means banks and lending institutions risk leaving a property vacant for two to three months, directly increasing holding costs and even attracting break-ins. Hence December can also become the month of mortgagee auctions.
Get your finance ready in advance
It’s not ideal to start looking for finance just as your lender is heading out the door for Christmas holidays. Have your borrowing capacity calculated beforehand, seek approval in principle from your broker and have your deposit in place. Start looking at properties a couple of months in advance, so you’re in the know as regards to local pricing and then in the position to negotiate. Don’t be scared to submit a hard offer as you need to know where the vendor stands. Without discovering their actual position or motivation, it is next to impossible to get a bargain.
“New Year settlement” = February or later
Everything takes that bit longer to move through the system over the festive period, so be prepared to be patient once you’ve successfully purchased. While it helps to be aware of when each of your individual team members takes leave, ultimately you won’t be able to persuade them to stick around for the sake of your new investment! Take advantage of this extra time towards settlement and finalise your new property management team, seeking out quality tenants in the meantime who’ll be ready to take up residence as soon as possible.
Your preparation starts now
To be a successful investor, you need to take an anti-status quo position - that is, be prepared to move against the tide. If everyone else is going to be out of the game, you need to be physically located where you can best take advantage of the situation. This may mean being ready to jump on a plane and inspect a potential new property interstate if that’s what it takes to find your new investment. Agents throughout the nation will be motivated to sell in December, all seeking completion before year’s end. Get ready to make your move and enjoy some of that Christmas cheer for yourself!