November 29th, 2011 12:36 PM by Lehel S.
7 Reasons Why Now Is a Great Time to
Invest in Real Estate
You've been hearing for years that it’s a great time to buy real estate. When the bubble burst a few years ago, and people were losing money on their houses, it made investing in real estate a scary proposition.
But thanks to the same recession that caused this real estate mess, there are loads of opportunities for those with minimal financial resources to buy real estate. Here are seven reasons why it’s currently a buyer’s market in 2011.
1. Mortgage Interest Rates Are Low Again
Several years back when the mortgage rates hit an all-time low, people went crazy buying homes and investment properties. Some of the same people ended up getting greedy and borrowed against their newfound equity, which eventually contributed to the downturn of the real estate market. Without repeating those same mistakes, buyer's can take advantage of having a mortgage payment that is more affordable than rent, with 30 year fixed interest rates as low as 3.50%.
2. The High Volume of Recent Foreclosures
Many former homeowners have been displaced due to foreclosure, so there are a lot more renters in the market, making it optimal for investors to buy rental properties without the burden of a mortgage payment. This also gives first time buyers the opportunity to negotiate a fair price on a home with the bank, without dealing directly with a homeowner who may need to make a certain profit.
3. Tenants Often Prefer Private Landlords
Most people would prefer to rent from a good private landlord as opposed to a property management company. For some, it is the security of knowing that only your landlord has the key to your home. Others might feel that there is an opportunity to eventually purchase the home through a lease option to buy, or lease-purchase contract. For someone looking to buy investment property, finding potential renters will not be a struggle.
4. Real Estate Prices Are at a Low
In many markets, real estate is pretty cheap, especially compared to the prices of 2006-2007. Considering that housing is generally your biggest expense, a buyer should consider a purchase when the market is down. Home prices in previous years discouraged a lot of buyers, but now that prices are at their lowest, this is the best time to buy.
5. The Short Sale Market
The short sale market in many areas has also created some great opportunities for getting a non-foreclosure home at a great price. For some buyers, a short sale is a better option than buying a bank owned home, because you never know what the history of the house is or what has happened while it has been sitting vacant.
6. Real Estate is a Great Long-Term Investment
Regardless of the recent crisis, real estate is still a good, long-term investment. If you look back 30 years, real estate is still valued much higher than it was. And if you have tenants paying your mortgage, it makes the investment that much more profitable. Buying a home is the single best tax writeoff you can have, and with growing equity, many buyer's invest in real estate to secure their financial future.
7. Easy Financing
Contrary to the what the media says about real estate loans, they are not hard to qualify for! FHA financing allows for low down payments, low rates, and common sense underwriting. There is no need for high credit scores and high down payments. Get connected with the right lending institution(Community Loan & Housing,) and you can see how easy it is to be a homeowner!
If you do decide to invest, meet with your trusted real estate agent who can help you navigate the ever changing landscape of the real estate market. Your agent know's when properties are about to go on the market and may have a lead on a short sale property that can be a great buy.