Why your first home should be a smart Investment

Financing

 

Have you consider buying an investment property? It's a trend that's taking over real estate, as savvy investors look to put their money in an appreciating asset. Here are five reasons to consider it.

1. Rates are crazy low - As expected, The Fed cut rates 25bps yesterday, September 18, 2019! This is the rate, 1.75% to 2.00% at which one bank can borrow money from another bank in overnight lending. This does NOT correlate to a home mortgage interest rate drop directly, but with Bonds – (Mortgage Backed Securities) MBS’s /mortgages are unchanged, Mortgage interest rates will remain historically low, in the mid 3’s to low 4’s for some time. Because leading is sooooo cheep, lower rates mean more affordable lending, or more buying power for your money if you choose to reach for a higher price point.

2. Because it will appreciate - According to CoreLogic, "The overall home price index (HPI) has increased on a year-over-year basis every month for seven years." The long-term price appreciation of real estate can provide one of the safest investments out there. Plus it's not as volatile as the Stockmarket. 

3. Because passive income is good - Yes, it's nice to know there will likely be appreciation over time, but the real key to success with investment properties is passive income. The best part about rental properties is that they provide a stable income. What would be better than having a check sent to you every month? In order to have positive cash flow, you have to make sure you invest in a profitable rental property.

4. To turn it into a long or short-term rental - The short-term rental market has opened up a new world of opportunity for investors. By buying in the right location, say by the beach, near a ski resort, college, or in close proximity to a popular annual event like Coachella, you have the potential of making a significant return in a short period of time. Just be sure to check the local laws, as lots of cities have been cracking down on Airbnb and other services.

5. Because it can help you buy the home of your dreams down the line - Buying an investment property before your first home does not imply that you won't have the funds to purchase your actual home at some point. In fact, investment properties that have been purchased wisely and have grown in value can offer you a sizeable amount of wealth and equity.

I've helped lots of people just like you take control of there financial wealth building through real estate investing. Give me a call today and let's figure out how to make that true for you too.