It’s a Great Time to Invest in Real Estate
After the housing bubble collapse in recent years, investing in real estate may not be at the top of your radar. But actually, now is a great time for it! How can that be?
Since the housing bubble burst, mortgage lenders have tightened their lending requirements. After all, no one wants to experience that financial crisis again. But even with more stringent requirements, the real estate market has become quite strong again. According to CoreLogic, home prices rose 5.4% in April, 5.3% in May, and 5.7% in June of 2016. That’s consistent and solid growth.
Better yet, foreclosures are their lowest levels since 2000. That means less debt, better affordability, and more people staying in their homes. Maybe investing in this sector is for you after all.
Why You Should Invest in Real Estate
Like any investment, you need to understand what you are getting. Unlike stocks, your investment is something you can actually touch – a property. You can always sell your asset if you need to, and you can even live in it if you want. You can’t do that with stocks!
With an investment property, you can rent it out to get the income. Use this income to pay off your mortgage faster or invest in other assets. Also, chances are, you shouldn’t have trouble finding renters; after all, everyone needs a place to live. For you, this isn’t just income – it is a steady and reliable source of income. And who doesn’t want that?
Finally, if you have ever listened to someone talk about investments, what is the top strategy? Diversify! Having a real estate component to your portfolio gives you that diversification. And that is smart planning.
So How Can You Get Started?
If you are interested in buying an investment property, take a look at these steps to help you get started:
- Check your finances: Compare your income and assets with your debt to see if buying an investment property is within reach. Have cash available for investing and a down payment.
- Can you handle the risk?: Buying property has its risks. Do you feel truly confident that you can handle the possibility of two mortgages, with all of their fixed and variable expenses?
- Start budgeting: Yes, that dreaded word. But creating a true and complete budget is the best – and only – way to determine if buying an investment property is in the cards for you. Use free online calculators to make this step easier.
What is the mortgage process like when buying an investment property? Check out these steps to get the lowdown:
- Get pre-approved: This helps you stay within your budget and shows you are serious about your investment property.
- Find the right place. Look at the area, amenities, and commuting possibilities.
- Make an offer. You may need to negotiate.
- Address the details. This can include getting an appraisal and signing paperwork.
- Close and get the keys to your new investment property!
The Importance of Getting Pre-approved
Getting pre-approved lets you know how much you are allowed to borrow and at what rate. This sets the stage for the price of houses you should consider buying. And it lets you know if you need to adjust your budget.
Using loan officers at Shamrock Financial for your investment property purchase is a wise decision. They create the actual mortgage, recommend various programs that can help increase affordability, explain the financial details of your loan, and suggest ways you can better your finances if needed. They are a huge part of the process, and have the expertise to simplify it.
The Benefits of Working with Shamrock Financial
When you want to purchase an investment property, look to the business that knows the business – Shamrock Financial. With several decades of servicing the mortgage needs of individuals and businesses alike, rest assured that home sweet home is right around the corner. Give us a call and let’s get started.