Is Real Estate Still a Good Investment?
Economic woes have scared many investors away from Wall Street. For many individuals, building wealth through investments now seems frightening and overly complex. Fortunately, most investors can still enjoy security and build long-term wealth with real estate investments. Using a loan to purchase a home or investment property in a buyer's market is a great way to secure valuable, concrete assets.
Enjoy Security with Real Estate Investments
Seasoned investors know that even the best stock investments carry a high level of risk. Those investors who are looking for long-term security often choose real estate investments precisely because property cannot vanish. Though property values may decline during phases of economic struggle, history has proven that such values rebound and often increase over time. It is this tendency to regain value quickly that makes real estate investments a wise choice for the long-term investor.
In addition to offering security in terms of investment value, real property also offers personal security. The investor who carefully evaluates financing options and buys a home doesn't need to worry about fluctuations in rent prices. Borrowers who make mortgage payments on time are also more likely to secure lower interest rates when making additional real estate purchases. In fact, many successful property investors break into the real estate market with the purchase of a home.
In our time working with Sacramento-area investors, we've noticed that many individuals believe that you can only purchase investment property if you have a significant amount of cash on hand. However, this simply isn't true. So long as the terms of a mortgage are good, buyers can finance the purchase of investment property. Remember to talk with your CPA or financial adviser before making the decision to take out a loan for a real estate purchase. A licensed realtor and loan adviser will also help you evaluate your options before you buy.
Evaluate Your Options and Buy with Confidence
Whether you are a seasoned property investor or a new real estate buyer, it pays to do your research. Carefully evaluating your options before you buy will protect your pocketbook and helps to ensure that you are making a wise investment. Carefully evaluating your options can be time consuming but will save you from making the mistake of purchasing a mediocre property in haste. Remember that you'll need to evaluate both the property you are interested in purchasing and the financing that you'll use to buy the property.
Carefully evaluate the property you would like to purchase to ensure that it will make a good long-term investment. Many first-time buyers make the mistake of focusing only on the appearance and structural integrity of a home or commercial building. While the building itself is certainly important, you'll also need to broaden your view and evaluate the area in which the property is located. Work with a licensed realtor to look up market trends in the area. If properties have decreased in value even in strong real estate markets, it is likely that the property will make a poor investment. Spend time thinking about why potential renters or future buyers might be interested in the property.
Familiarize yourself with your financing options and review all loan documents before signing on the dotted line. Even experienced investors should work with a loan adviser when financing a property. In addition to checking interest rates and calculating how much money you can afford to borrow, you'll need to review loan documentation to ensure that there are no restrictions on the use of the property. Ask your CPA or financial adviser to calculate your tax and insurance burdens so that you have a reliable picture of your liability before you buy.
At Fritz Capital Group, we pride ourselves on being more than a mortgage lending company. Fritz Capital Group is your resource for home loans of all types and sizes, including finding you the right FHA loan, Equity loan or VA loan. Our experts lenders can assist you with all your mortgage and home loan needs - mortgage refinancing, making the most of your home's equity, and taking you through each stage of the home loan process.
