2010 is the ideal time to invest in real esate. While a myriad of people are focused solely on the decline in the market’s value, experienced investors fully comprehend the potential for capital appreciation opportunities the global economic crisis now presents. Low home prices along with low interest rates makes this the best time to become an investor. If you are contemplating investing in property. now is the time to do so. Experts say “when the money is easy and cheap to borrow, the houses are cheap and the repayments are low, it’s absolutely the best time to become an investor!” In 2009, U.S houses lost over $489 billion in value during the first 11 months. But this was said to be significantly lower than the $3.6 trillion which was lost in 2008. Jill Sjolin who is an agent with Windermere Real Estate in Woodinville, Washington is quoted as saying “ We haven’t seen home prices this low in so many years, coupled with the rates being so low.” Reuters are forecasting over 3 million foreclosures in 2010. The timing is right for real estate investment if have solid financial stability. But heed the sensible tips below which will help you take full advantage of the opportunity of a lifetime.
Know what you want and know your options:
First and foremost, potential investors need to recognize their options. All investment properties are not the same and can vary greatly. You will need to know what property type suits your strategy the best. Would you like to restore and resell properties, become a landlord, purchase land for development, own apartments, commercial real estate or wish to purchase for your own enjoyment? Residential housing would be the best option for first-time investors but the choice is yours.
Seek the advice of the experienced:
When potential investors partner with experience they have the better chance of knowing investment success. If you are a first-time investor find a real-estate agent with an excellent reputation. One who is highly experienced in investment property who can assist you in finding the prime property. Those who expect to do business with you again down the track will be more cautious as to the properties they recommend to you . They will wish to prove their integrity and good name. Collaborate with an experienced real estate and close the deal together. You will gain investment knowledge first hand and that’s a plus.
Learn the pros and cons of investing in real estate:
Talk to as many real-estate investors as you can. There are a host of real-estate investment blogs online. Talk to them about the pitfalls they have personally experienced. Those wishing to become landlords would certainly do themselves a favour if they head off to their district court and sat in on some landlord/tenant cases so they can gain some knowledge as to what challenges landlords face.
Think location, location, location:
If you are wishing to purchase a property for rental it is imperative that you seek the ideal location. Location is the key word and homes in highly populated high rent areas are ideal. Rural areas should be avoided at all costs as potential renters are fewer due to the lower population. Try to find an investment property with multiple bedrooms and bathrooms. These are highly popular and rent well. Safety is a top priority as well, renters gravitate to the safer neighbourhoods. More so when children come into the equation. So check the crime rate and ensure that the investment property is in a good school district.
Think of the potential resale opportunities:
Invest in property which has great potential for resale. Properties which are close to shopping malls, high schools, college, hospitals, public transportation, parks, lakes and other amenities are the most popular. These attract renters and buyers and gives one great possibilities for resale in the future. Equity in property usually rises faster in these particular areas. Another thing to remember is the more the property has to offer, the more attractive it will be to others. Those little extras all add up, good size yards for children to play, eye-catching landscape, swimming pools, spas, close proximity to schools, doctors and so forth.
Ensure that you have financial backing sitting in readiness:
Speak to your potential lenders about your financial situation. Ensure that you have enough financial assets to handle the highs and the lows that always accompany investments. If you are contemplating a rental you will need to be able to cover costs when there is a vacancy. Therefore you will need to have approximately six months of mortgage payments saved in advance.
Long Term Rentals Pay Off:
When thinking of investment properties for rentals think long term. Long term is far more beneficial for both parties, the renter as well as the owner of the said property. You will know that rental money is consistent and you will not have the stress related to consistently seeking tenants every few months. Rentals pay off, more so now that one can purchase an investment home for as low as $10,000 or less. In no time at all, your mortgage will be paid out and the money then becomes cash in your bank account. The equity increases if you have chosen the ideal location and one can then use this to invest in another investment property. Consequently you end up owning two rental properties and even more if you do this right with a financial planner advising you along the way.
A few properties in the U.S have gone for as little as a dollar only recently. Yes one dollar, amazing isn’t it? In fact Australian and other international investors have been cashing in on the economic crisis in a big way. The number of homes facing foreclosure in 2009 was approximately 2.8 million according to Reuters. But the majority of foreclosed homes in the U.S can be purchased for as little a 22% of the current market value. This makes investment property very affordable to those with the financial backing to purchase.
With house prices so low you could end up with your dream home at very little cost. This enables you to spend the huge amount of money saved on all those little extras you’ve dreamed about. The stunning landscape, the spa, swimming pool, pergola, granny flat up the back for dad and mom. The possibilities are endless. A $200,000 home could be yours for $44,000. Sounds wonderful doesn’t it? Just think, all that money you saved can go into the college savings account for your children. If you wish to sell down the track you will make a wonderful profit with not much outlay at all. 2010 is definitely the time to contemplate investing in real estate. The housing market is the lowest it has ever been since the Wall Street Crash in October 1929. Look to the future and invest now, you will be so glad you did when the economic crisis becomes a thing of the past.
“NInety percent of all millioanaires become so through owning real estate”.