One of the biggest investments of most people lives.
It’s also a long term investment opportunity. I don’t know if prices have ever recovered from the 2008 crash.
What I do know is that prices are heading downwards and fast right now. People are looking to turn assets into cash.
Their second properties are hitting the market and they are cheap.
As entrepreneurs and investors, this is an opportunity. Partly because the buy-in is cheap. But also because the rental market is as busy as ever.
I got out of the property market a few years ago. In my area prices were at all-time highs and it felt like time to cash out.
Since then I have always kept an eye on the market wherever I am. Over the last few months, in many areas, it has imploded.
Properties are up with 30% plus discounts.
It seems like an opportunity t get back in. One of the reasons is the low buy-in.
A 2-bed property that’s $50k only needs a $5k buy-in and low fees. The mortgage rate even over 3 years is less than $1000 on a fixed rate.
Rental around $800 per month is a decent rate of return. Take a 6 or 7-year mortgage and it’s paying the bill for the property every month plus $3k or so in pre-tax profit each year.
I like a shorter mortgage so that I own the property quicker. But that’s a personal choice, not sound financial advice.
Those opportunities are out there if you have the cash to make the down payments. Plus the steady income to cover the mortgage payment in months with no rent. Then it looks like a property is a valid investment once again.
Like any investment decision. You should seek some independent financial advice before you commit. The information here is my point of view and opinion on the subject.
That said there are some other pointers you should look at such as:
Are there taxes or fees to due on top of the property price? What will those be and do you have the cash to cover them. What do they do to the payback time.
What’s the area like? What do rental incomes look like there?
What is the tax rate you will pay on rental income and what can you write off each year?
What will this investment do for you? Its recurring income so it’s always good to have an idea of what the plan will be for that. Before you commit to spending cash and taking on debt. Which is what a mortgage is. Albeit we are betting that the value of the property is always more than the debt.
If you have been looking at property as a potential investment. Now is a good time to take a closer look.
The trifecta of low prices, low-interest rates, and a strong rental market. Could make property investment more affordable than ever before.
As an income stream in a portfolio of investments and businesses. Property can be hard to beat.