Now is the time to invest in real estate

Now is the time

Historically no investment outperforms real estate. The reason is real estate is as necessary as a haircut. It is a tangible, seen, useful investment that makes sense; it is easy to understand and surprisingly attainable; everyone needs a roof over his or her heads.

There has been no time in history more favorable to invest in real estate than now. Here are the top three reasons why you should consider investing in real estate now.

Interest rates are at an all time low. April 2 2009, interests for a 30 year conventional (loan amounts of $417,000 and below) fixed rate mortgage were at the lowest levels since Freddie Mac, a United States owned company which is one of the largest buyers of mortgage backed securities worldwide, began keeping records in 1971. The rate on April 2 2009 was 4.78%.

This means people who opt to invest in real estate now can get more house for less money. But people looking to take advantage of the lowest rates in history better act fast. Interest rates are volatile and prone to daily fluctuation; savvy investors will act fast to lock in low rates when purchasing or refinancing properties.

It’s a buyer’s market. The housing market is saturated with homes waiting to be sold. The recent financial meltdown has caused many potential homebuyers to reconsider purchasing. This reconsideration has wreaked havoc on builders who are stuck with homes they were trying to sell before the crisis occurred. Adding to the supply glut on the housing market are the homes of people in danger of foreclosure who are trying to dump their property and bank owned, REO, properties.

This means home prices are falling and the time is right to buy. The falling prices for homes on the market coupled with mortgage rates at an all time low make investing in real estate possible for people who never thought they’d be able to own their own homes. Another plus is that Fannie Mae, in order to stabilize the market, is offering loan programs to borrowers who wouldn’t ordinarily be able to buy a home.

It’s a safe, smart investment. Whether a person is buying their first home or an investment property for cash flow real estate allows the investor some of the best opportunities available to make their money work for them. Real estate allows an investor to leverage their money; banks, because of the low risk involved with a real estate investment compared to stocks and bonds, scramble to lend money for investment property. Real estate investments provide the investor with an income and increases cash flow. Real estate investments provide the investor with tax advantages not available for other types of investments.

This means people who choose to invest in real estate are able to do more with their money. When an investor diversifies to real estate they are able to leverage their money more efficiently. The tax benefits, including the tax incentive provided for in the new stimulus package, available on investment real estate are phenomenal. The most important benefit to investing in real estate now is that real estate allows the investor to control their money.

The economic meltdown and the innovative steps being taken to stabilize the market have created a unique opportunity. The real estate market is ripe for the picking. Now is the perfect time to invest in real estate.

Want to know what points are? Want to know about 1031 exchanges? Want to know if you have to pay a real estate agents commission when you buy or sell? Want to know how mortgage brokers can offer a “no points no fee loan”? Want to know why you need title insurance? I love answering your questions about loans, real estate, and any other question you may have about the industry.

Shoot me an email with your questions and I will do my best to answer them in my column. Please send questions to america@vgrouprm.com. I’ll do my best to answer.