Why to Invest in Real Estate NOW

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You have probably heard over and over again lately about the phenomenal buying market out there for property enthusiasts. In fact, even if you are not a bona fide investor it is still a great time to get into the business of investing in property. One of the reasons for this ripe environment to invest and actually make significant amounts of money on that investment is the low costs of obtaining property that we are seeing today.

Today’s Low, Low Cost of Financing

Not only are homes priced lower but also the actual cost to borrow money to purchase the homes is also lower. Not too many years ago the cost of a mortgage was as high as many credit cards are today and when you compound that into 30-year fixed mortgages, the finance charges become astronomical. With today’s interest rates, however, monthly payments for the same house you might have purchased at the old interest rates are much lower.

Let’s look at a $200,000 home. If you financed it back in the 80s when rates were as high as 16% (or more) the total monthly payment amount would be about $2,900. Factor in today’s record-setting interest rates and the monthly payment is more than fifty percent less at around $1,200. This is for the same house!

Home Prices Remain Very Low

After the infamous market crash of 2007, housing prices plummeted and they have remained at or near bottom for quite some time now. For buyers and investors this translates to one of the best opportunities – especially when combining low home prices with record low interest rates. Not only is the home affordable, but so is the cost to borrow money to buy it.

Consider the example above of the $200,000 home. If your budget is $200,000 and you were not buying in today’s market – how much home would you be able to afford within that amount?  Of course, what you would be able to get will depend on location, neighborhood, style of home and other factors. But in general, the amount of house you would be able to afford ten years ago does not even compare to what you can get today for the same amount of money.

Invest for Pennies on the Dollar Now – Enjoy Sizable Returns Later

When billionaire investor Warren Buffett was recently asked about the best investment sectors of today he suggested investing in single-family homes on a 30-year fixed rate mortgage. This advice came in light of current market conditions that end up in pennies on the dollar investment schemes. Buying a home today for under $200,000 will easily yield more than double the returns by the time the mortgage is paid off. Many savvy homeowners today are also making extra payments to shorten the term length of their mortgages.

With the plethora of investors and buyers that are delving into the property market to seize the opportunities out there, many have been turning to any means possible to come up with the down payments. Whether dipping into savings, obtaining a home equity line of credit on an existing home, converting the purchased home into a rental property – buyers are getting creative.

If you would like to explore your options and find out how you can take advantage of the amazing investment opportunities right now, contact us today. We would love to guide you and come with up with some ideas that work for you.