Most won’t argue that real estate is one of the most reliable and predictable investments you can make. Always remember, however, that it’s always about timing and location, location, location! Considering that the U.S. GDP has been revised up to an annualized growth rate of 3.1% from 3%, this is the fastest rate since the first quarter of 2015. With due diligence, you can expect your real estate investment to significantly outperform the GDP.
Now is also the time to make those low bank interest rates work for you. Although the interest rate you’ll pay has bumped up slightly over the past year, rates remain at historic lows. The expert consensus is a less than 8% chance of a rate increase the remainder of this year. Serious real estate investors leverage their own money by borrowing. As long as your investment outperforms the interest rate (plus after tax-deductible business expenses), it’s an opportunity for you to leverage your money into something much bigger.
Banks continue to loosen the reins on lending standards (slightly). Though you won’t get the 125% loan-to-value financing that some investors over-qualified for during the 2000s, if you have a job and decent credit, qualifying for a loan with less than a 20% down payment is quite obtainable.
Despite home prices rising dramatically since 2012, there are still plenty of deals out there. Let’s face it. There are (and always will be) foreclosures on the market. Not a lot, but investors dig deep to find the best opportunities. Another good source for people in a hurry to sell at a discount are estate attorneys representing heirs that don’t want to hassle with a sale at a distant location. Also consider divorce and bankruptcy attorneys representing people with bigger problems than selling a house but desperately needing the cash. Accountants are worth checking into as well.
Still another reason now is a good time to invest in real estate is that technology has come of age for the investor. Whether you are buying, selling, renting, or looking for a handyman, it’s all automated and online. You can receive automated email alerts for new listings. Take virtual tours of houses and neighborhoods. Even if your banker won’t qualify you for a loan, you can seek financing through crowdfunding websites, or a plethora of other third-party financing sources.
So, start now! If you don’t, in another 10 years, you’ll wish you had!
Do you have any advice about investing in real estate? Please leave your thoughts in the comments below. And if you have any questions about selling or buying a home in metro Albuquerque, be sure to contact me today!
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