The key to investing in real estate is not to buy low and sell high – or even buy low and hold. No, successful real estate investors realize that it is not enough to just get a deal on a property; the market conditions have to be right for an investment to be profitable. Fortunately, for Chicago-area investors, conditions in the Chicago-area market are ripe for savvy investors to make profitable investments.

Successful investors take several factors into consideration when deciding whether the time is right to invest. They look at factors such as median home price, whether that price is rising or falling and the cost of financing. Let’s take a moment to look at each of these in turn as they apply to the Chicago real estate market.

Median Home Price

Ideally, real estate investors want property values in a market to be low but steady or rising. A market that has reached the bottom and begun the slow climb back up is perfect. Investing in this type of market not only allows the investor to buy property at a discount but also to quickly build equity to use as leverage to purchase other properties.

In the greater Chicago area, the median sale price for a single-family home was $164,900 in February of 2013. In February of 2012, the median sale price of a single-family home reached its lowest point in five years at $157,000. With a 5.4% gain over the past year, it seems that the Chicago market for single-family homes has reached the bottom and is beginning the slow climb back up.

Price activity

In a year-to-year comparison, the median sale price for single-family homes in Chicago rose 5.4% from $157,000 to $164,900. This is after six years of steady decline. In addition to this positive price movement, we are fast approaching the summer months. Typically, prices are at their lowest at the end of fall and the beginning of spring. They quickly spike to their yearly peak in July and August.

For investors that like to buy and flip homes, now is the time to get into the market. Just last year, the median sale price jumped from $157,000 in February of 2012 to $201,000 in August of 2012. Early spring is the ideal time to buy if you are an investor who likes to rehab and flip properties. There are more buyers in the summer, and the chance of a bidding war increases as the number of potential buyers increases. Of course, if you plan to invest in the near future, and you wait until the height of the summer, you will pay more as new buyers enter the market and drive prices up.

Favorable Interest Rates

Many real estate investors prefer to pay cash for investment properties – either their own or their investors. Still, some need the help of a bank or other lenders to acquire new properties. For those who still need a little help, the current interest rate plays a large role in whether an investment will be profitable or not.Be Bold, Be Smart - Have Good Credit and/or Some Liquidity Choose the Right Investment Advisors

Right now interest rates are at historic lows, but they won’t stay there for much longer. They can’t. The increase in interest rates is as inevitable as the sun rising, but they haven’t started to rise yet. Investors can still take advantage of those low interest rates.

While most investors realize that the fees associated with these loans will be higher than they are for the individual homebuyer, they also realize that the current interest rates to buy investment properties are still as low as they will see in their lifetimes. Couple that with the historic low sale prices, and it’s easy to see that now is the time to invest.

Fate favors the bold, but she also favors those who prepare and do their homework. Right now, signs indicate that the Chicago market is ready for investment. How long these conditions will persist is anybody’s guess, but they are here right now. Investors will regret letting this opportunity to invest in Chicago real estate pass by if they don’t take action while they can.

Source: Market statistics obtained from Zillow.com and deemed reliable if not accurate.

by, Jonathan Williams: EquityBuild News Contributor

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