If you are thinking of purchasing real estate, you may be wondering where to buy investment property. While some people are reluctant to invest in this area, due to the events of the last several years, now is actually a great time to buy. Why is this true? The price of the market has not been this low in many years, and real estate still has good underlying value. It is not the commodity itself which has fallen, but the market’s perception instead. In fact, many experts believe this is only a natural swing in the opposite direction, which is working to correct the inflated prices created by the mortgage bubble. Why is this important? It means that real estate still represents a solid value, and its price will eventual be restored to proper levels.
All of this means this is the perfect buying opportunity, especially if you are investing for the long term. As this is the safest method anyway, this should be your preferred option. Otherwise you are simply speculated on short term price fluctuations, which is no safer than day trading stocks! However, if you purchase property for its income yield, rather than looking for the price to rise sharply, you are insulated from market action.
However, while you may be convinced that real estate is the right move at the moment, you may still wonder where to buy investment property. This is a good question, and purchasing property in the right location is critical. Otherwise, you will have trouble renting it out to good tenants, which means you will lose income. Or, you may have to settle for less than suitable candidates to keep your property filled, and they may cause damage to your property! Further, if your house, office or commercial building is in an undesirable location, your rental rates will be lower as well.
So, for all of these reasons, it is important to research the surrounding area before buying any property. What should you look for? Strong industry nearby and a good local economy are two important factors. These ensure that tenants will be plentiful, as new families and businesses will be moving in to take advantage of these conditions. Also, this will work to keep your property value high too, as people will want to buy in the area.
Also, if you are buying a residential investment property, schools are crucial as well. This often overlooked factor, can mean the difference between an easy rental income, and trouble filling your home. After all, if your property is in the wrong school district, families will be reluctant to move in. How can you determine which school is the best in the local area? This information is now readily available online, with school rating sites being abundant. These are resources for families considering a move, but they will work for your purposes as well! Pick out a school which is well-liked in the community, and your investment will be more secure.
Yet, when wondering where to buy investment property, it is important to look at the larger picture as well. What area of the country should you purchase real estate in at the moment? The answer may surprise you, as the states which were hardest hit by the mortgage crisis, are actually a good starting point. The foreclosure rates in these areas were well above those found in the rest of the nation, meaning many families were forced out of their homes. Yet, they still need places to live, so the majority of these turned to rentals. Thus, while the sales market is very weak, the demand for rentals is quite high! This means you should have no trouble filling your units, and you can charge peak market rates as well.
Also, with so many foreclosures hitting the market at once, the prices fell dramatically. This means you can still purchase real estate at a steep discount, making these areas even more attractive! For example, Phoenix felt the effects of the real estate bubble in a strong way, and you can get many deals at the moment. Homes which were selling for $400,000 before the collapse, can now be purchased for $280,000 or $300,000! Yet, the rent you can collect every month, is comparable to the rates which were offered before the housing market fell. That means your cost basis in your investment property is much smaller, yet your income will remain the same. This is the best of both worlds, and that is why buying now is an excellent strategy.
However, deciding where to buy investment property is a large step, and it may be scary for you. If this is true in your situation, there may be a unique strategy you can use to get started. Purchase a vacation home instead, which will provide you with many of the same benefits. For example, as long as you put this property up for rent when you aren’t using it yourself, you can claim all of the same tax deductions. So, if you and your family use it three weeks every year, the remaining forty-nine are all tax deductible! Also, while you will probably have less steady rental income using this approach, you could bring in enough to pay for the mortgage payments. Over time, your equity will increase in the property, without you having to spend a penny. Your tenants will be paying down your mortgage for you, and you will have a guaranteed vacation spot each year for your family as well. This type of innovative strategy can pay good dividends over time, and allow you to ease your way into real estate investing.
So, with all of these attractive benefits, buying real estate to make income is a good choice. With the low price you can get a better deal at the moment, yet rental rates have remained high. That means your return on investment should be better overall, making this a great technique to use to grow your portfolio. Using this excellent information, you now know where to buy investment property for maximum profits!