With the current economic conditions we are all facing, it is creating a large amount of anxiety for individuals. However, this also creates opportunity for individuals to take advantage of a favorable environment.
Currently, the stock market is not as attractive as it once was so many savvy investors are looking for something that is more tangible. This boom in the investment property market shows no apparent signs of slowing down as the economy continues to sputter along.
Why does property investment make sense, you may ask? There are a few important things to be cognizant of. First property prices are at the lowest they have been in generations. A few years ago the real estate market had prices climbing sky high; however, that is no longer the case. The values of real estate are low however there is still demand for property to live in since people require a roof over their heads.
With many individuals not able to afford their current mortgages they are looking for rental units to live in. This has created an influx of new tenants while current rental properties cannot keep up with demand. Over the past decade most people were buying homes instead of renting so new rental unit developments were tepid at best. Now everyone is wants a rental unit to live in and for those investors who want to capitalize on this opportunity timing is everything.
Securing financing for a mortgage to purchase an Investment property is available provided the borrower has a good credit score and small down payment. This may sound intimidating and expensive however it is readily attainable provided the investor is ready to take on the challenge.
The mortgage for the property investment will have the lowest interest rates seen in generations so the cost of servicing this debt is minimal at best. Also the seller of the property you are considering to buy may be highly motivated and give you a very good price. Looking at foreclosed and distressed properties is also excellent for getting a bargain.When deciding on a purchase price for an investment property look at the local market and how much people are paying for rent in a similar unit. Subtract from the rent amount what you would pay to service the mortgage and taxes. If the balance is positive it will be a good investment just remember that any investment property must be cash flow positive meaning it makes profit every month.