Investment Property: Growing Your Wealth
If you’re looking for a way to grow your nest egg, investing in real estate is still a great idea. There are many reasons to purchase a rental property, and the market is still favoring buyers! With today’s low rates and home prices, your purchasing power is strong, allowing you to get more home for the money.
Benefits of owning investment properties include:
- Diversity in your financial portfolio
- Rental rates are climbing as demand for rentals increases
- Rising income from rental fees over time mean more cash in your pocket as you pay off your mortgage
- Tax benefits of depreciation and expenses*
Why Invest Now?
Numerous market factors make now a great time for investing. Here are the two main reasons you should be seriously considering investing in real estate:
Historically low interest rates. It’s been all over the news: interest rates are lower than they have ever been. While we’ve been enjoying this trend for months, it can’t last forever. Every rise in interest rates — even as little as an eighth of a percent — reduces your purchasing power, meaning you get less property for the money.
Very low housing prices. Not only are rates at historic lows, but housing prices are down as well. A backlog of homes on the market — a 6.1-month supply at the end of January, according to the National Association of REALTORS® — helps to keep prices low in areas all across the country. The Case-Shiller Index indicates home prices are at levels last seen in late 2002; but again, there’s no telling how long this will last.
Combine the low rates with low housing prices and you’ve got the ultimate opportunity to invest in real estate. Experts still agree that long-term investment in real estate is a smart choice. With the market so favorable to buyers, there’s no time like the present to work on building your wealth!
Is Investing in Real Estate Right for You?
Investing in real estate is not for everyone, of course. You must be prepared to landlord your property or to hire a management company to maintain it for you. Despite the favorable market, there is no guarantee that things will stay this way; you must be prepared to take a loss, as you would on any investment you make. You should be willing to hold on to any property you purchase for at least several years as the market is not favorable to sellers at this time and we don’t know when that will change. And of course, there is no guarantee that you will be able to rent a property to capacity, continuously, at a price that covers your expenses.
But the benefits of purchasing investment property outweigh the negatives for many people. If you’re ready to investigate how investment properties can enhance your financial portfolio, I can help you review your finances and determine the strategy and financing options that can benefit you the most. Call me today to take advantage of the market and invest in your future!
* We are not a tax advisory firm. The information contained in this article is for informational purposes only and may not reflect current tax year rules and regulations. Consult your tax advisor or the IRS for current tax year rules, restrictions and regulations.