The housing bubble burst that happened a few years ago resulted in a lot of investors losing their money, and made real estate investing seem like a scary thing to put your money in. Fortunately, low prices and near record low interest rates make this the best time to invest in real estate. Not only that, but the economy seems to be on the right track to recovery, which means that prices and interest rates have already started to increase, and do not seem like they are about to stop their growing trend.
Why Invest in Real Estate?
The recent economic crisis created many opportunities for those who have the means to invest in real estate. The high volume of recent foreclosures has created a larger pool of renters, which means that rental properties are a better investment than ever. Finding people to rent your properties should be easier now with more and more people finding jobs, and selling properties for a profit should be getting easier as well.
Mortgage rates are still at near record lows, which means that investing in properties is even more profitable. However, rates have already started to climb, so there isn’t too much time to take advantage of them. Add to this the fact that real estate prices are currently very low, and you have higher chances of making a lot of money by investing in this current market.
Investing in short sales is also a great opportunity right now, as more people prefer this option to foreclosure. Buying a short sale is a much better option than buying a foreclosed property, because there are bigger chances of a property being vandalized since it was foreclosed.
No matter what happens in the future, investing in real estate is still a good long-term investment. Current real estate prices are higher than they were thirty years ago, and having tenants makes the investment even more profitable.
The Future of Investment Property Mortgage Rates
Recent forecasts predict that mortgage rates will continue to increase over the next couple of years, but not significantly. Of course, even a 1 percent increase in interest rates will cost the investor a relatively large amount of money, but the increase will most likely come slowly without taking anyone by surprise.
At only 2 percent per year, the economic growth is slower than anticipated, which means that mortgage rates will also slowly increase over time. The only thing that would stop the economic growth and rates increase would be a new war or a new economic crisis in Europe. Currently, the job market is also experiencing a steady growth, meaning that more people will be relocating and looking for new homes or rentals, to the advantage of the investor.
Even if mortgage rates go over 4.5 percent in 2014, they will still be lower than before the economic crisis, keeping real estate investing still more affordable than ever.
Low mortgage rates are creating the perfect opportunity for investors to make a nice profit, but 2013 may as well be the last chance you will get to take advantage of rates this low. The good news is that any increase in mortgage rates comes slowly, so real estate investors can still make a profit in the near future. While rates are, indeed, increasing, so is the number of people who are looking for a home or a rental, so, even if the profits won’t be so great as the rates increase, the number of opportunities to make a profit will be greater in the years to come.