Trends show that the real estate market is in the best place it has been since before the bubble burst in 2008. Investing in real estate can be a great decision, but there are many things to be considered before taking the plunge. Whether it is a rental property, a first time home, or a rehab, the stress from buying a home ranks higher than having troubles at work, according to a study done in the 1960s by psychiatrists Thomas Holmes and Richard Rahe, linking stress to illness. To make the process easier, it is important to be aware of all the aspects of home buying, which will both save time and money, and reduce stress along the way.
Mortgages With Great Interest Rates
One of the first steps to consider is finding a mortgage company that is the best fit for your needs. There are many companies now who offer mortgages with tremendous interest rates. There are also FHA loans available to those who qualify and are buying their first home. It is important to do the research to find which is best suited for your needs. Be aware! There are many things that might affect those unbelievably good interest rates though, such as student loans, auto loans, payday loans, or other mortgages.
reddie Mac indicates in their report on multifamily property outlooks for 2016 that they see mortgage rates as affordable. They also indicate that in 2015, there was a demand for such properties. A rental property is a great way to get into the real estate investment market and it appears that the trends are positive for this type of property.
An investment property is a great way to dip your toes in the real estate pond. There are a number of avenues that can be taken, whether it be a rental property or a home that is in need of renovations, only to be flipped and sold for profit, real estate investment is a commitment that should not be taken lightly. Rental properties are a great way for first time home buyers to experience property ownership and entrepreneurship, while having the mortgage paid. If a city setting is preferable, multi-family units offer a wonderful opportunity to live in a new home, while also collecting on an investment.
According to Realtor.org, the affordability of housing has declined from a year ago. The index now reads from 167.5 last year to 162.4. The median sales price for a single family home this April in the US was $233,700. That is a rise of 6.3 percent from the previous year’s numbers.
Additional good news for sellers is that mortgage rates dropped 6 basis points from last year and incomes rose approximately 2.3 percent. It would be preferable to have the income numbers higher, but that they have risen at all shows some potential to sell a home for more now than a year ago. Buyers can secure more attractive funding as compared to last year, which can help close the affordability gap. It’s impossible to guarantee profit in real estate, but these numbers show potential for profit for anyone sitting on an investment property, assuming the right buyer is found. Any improvements you’ve done will only increase your profit margin.
The northeast has seen the lowest dip in real estate affordability, of only 1.0%. The realtors that I work with in the Upstate and Central New York area are seeing a healthy sales market. As anecdotal examples, two homes in my neighbourhood have sold after less than a week on the market. They are in relatively the same area but of completely different size (one, a small, two bedroom single family bungalow on a desirable side street, residential neighbourhood, and the other a large, two story single family colonial in a mixed residential/commercial area).
Take a tip from an expert about the almighty importance of researching your location. “I have seen numerous buyers purchase properties without understanding the value of various locations. They think they are paying a good price based on square footage, bedroom and bath count, etc. without having a grip on how an area can have a dramatic effect on value.” – Bill Gassett
Take Gassett’s advice when picking the right property for you. Maybe finding a ranch style home, off the beaten path, would be better suited as an investment. According to Trulia, ranches are the most popular style of home out there, but you must research the numbers in the area the property is in to be sure this is true for that region. With the housing market again flourishing, there are many ranch style homes for sale. Real estate agents say that often times these can be found for a fraction of the price, due to an oversupply in the market or because the homes are in need of both repairs and improvements.
Stick To Your Budget
On top of the expense of the house itself, do not forget all of the monies spent after the mortgage paperwork is signed. Whether it is a single family, first time home, a multi-family, one that is helping to grow a real estate business, or a renovation, there are always expenses that come along. If you anticipate this and have funds set aside to manage renovations and repairs, you can increase the ultimate selling price of the home or business property when it is time to sell. On the other hand, you can always go for a simpler option of saving these extra costs. Frugaa.com is a recommended source to find best deals on such expenses and reduce the total figure.
It is so important to consider all of the financial goals and analysis before starting the search for a new home. Not only do you need to keep yourself organized, but you need to be sure the team that has been chosen to help complete the process is completing the process, i.e. attorneys, real estate agents, mortgage companies. Home buying can definitely turn into a part time job. So remember to consider all of the aspects involved before diving in and to be sure to take steps to eliminate the stress that is present in the process.
The answer to the question of whether buying real estate is right for you, depends on your situation. If you have the money available to cover expenses and are looking for a long term investment, it can be a great solution. Young people can purchase a home and watch its value grow over time, putting them in a great position when they are ready to sell. Older people can make an income rental property a part of their retirement plan. Research is your secret weapon, so do as much as you can, even if this means collaborating with experts in the field. A detailed approach is how to go the distance when investing in real estate.