Investing in Real Estate

I am far from thinking that the crisis is over. I think it will still take the best of us. Yet now is the moment I feel when buying investment real estate may really make sense. Here is why.

With the government printing additional $2 trillion, we know for a fact that the inflation is going to hit us some time soon. Everything will become more expensive, including mortgages and home prices. Regardless of the fact if the prices of the real estate market have bottomed out in each individual case or not, they are overall pretty close to the bottom. If you buy now, you can get a loan at around 5%, and it will remain a 5% interest loan for 30 years if you get a fixed rate (which you absolutely should). So your mortgage payment will remain the same whereas rental prices will be climbing inexorably and doubtlessly. Your income will be on the rise, too, with the inflation adjustments (it probably won't keep up with the inflation because now that they have pumped so much money into the system, they need to get it back, and they will be getting it back from us). So the payment on that very low interest rate mortgage will consume an ever smaller portion of your paycheck, or of the rental payment you receive from this investment property. And the price of the property will be increasing, along with the price of everything else.

During the inflation it makes no sense to simply save money. You need to invest it in some commodity to prevent it from losing value. They say that gold will be an excellent way of wealth preservation. I do not know about that. Gold is a thing that you have to buy and pay to store hoping it will appreciate. Whereas if you buy a piece of real estate, you can a) leverage your purchase, and b) put it to work for you deriving income from it as you wait for it to appreciate.

Right now I am helping a client of mine purchase a property in North Carolina which is listed for $17,400.00. That is right, just seventeen thousand dollars! It sold 9 years ago for $84,000 with a bank issuing a loan for that amount. Yes, it is a foreclosure. No, it is not in the best part of town. Yet, it has 3 Br/1.5 Ba sitting on a quarter of an acre of land with a fenced back yard. New vinyl siding, new vinyl windows, new copper pipes, and updated electrical system complete the picture. You better believe that this is going to be a good investment.

I just feel that with the approach of the inflation, loan rates are going to be considerably higher, and property prices will rise along with everything else. Now is the time to take advantage of the low prices and low mortgage rates to lock in your super low monthly payments for the 30 years to come.

By the way, I am about to launch a new website where you can search for NC foreclosures for free (this is a rare thing for those of you who tried searching for foreclosed properties online). The site is http://www.ncinforeclosure.com/. But this is not a self-promoting post. A nationwide free website for foreclosed properties is http://www.allhud.com/. Go ahead and work with any realtor you like. I just thought I would share what was on my mind.