Friday, January 6, 2012
Should you be buying a home or investment property with the recent report of apartment vacancies down and rental prices up?
www.bloomberg.com/news/2012-01-05/u-s-apartment-vacancies-decline-to-a-decade-low-of-5-2-rents-increase.html - good article about the strong rental market.
Have you been renting a home/apartment? Have you noticed that the rental prices have been going up? If so, you should talk to a lender,see how much of a loan you can get approved for and if your monthly rent would come out to being more or near the same dollar amount as buying a home and having a potential mortgage (and condo fee/h.o.a. fee if applicable). If you don't plan on staying on the area for a long period of time,then maybe renting is the best scenario for you,since we can't predict what your home would be worth in a year or two. On the other hand,you should also consider buying the home and if you move to keep it as an investment property. Evaluate this option with a financial planner or somebody close to you.
Have you thought about "moving up" to a larger spacee or "downsizing" because you have 'too much house', but are uncomfortable making a move now because of the market uncertainty, concerned at what price you can sell your current home? This is a great market to move up in for sure and it also a perfect time to think of "holding onto" your current home and turning it into an investment property because of the demand for rental homes verses the availability of rental properties (based on community you live in). Consider if you would be happy with what you would net in a home sale and if a potential monthly rent would cover your current mortgage or come very close to covering your current mortgage (if you haven't paid off your mortgage). If you are not happy where you would net on a potential home sale, especially if you could lose money on a sale, then holding onto your home as an investment propety may be a good solution. If you are happy with what you would net on a home sale, then the question that also comes into play is if you want it to be a long term investor or short term investor,verses just selling the home. The risk in holding onto a home where you are happy with the potential net proceeds on a sale today is that the home may not be worth the same in a year or two. The value can go up or go down. Also consider where you would put the money from a potential sale and if you would get a good or bad return. Talk to me about your home and we can evaluate the sales and rental market
If you have thought about buying an(other) investment property>,this is a great time to get in the market. It is a good supply and demand situation for landlords. As the article above shows,apartment vacancies are down and rental prices are going up. So you could have a large pool of potential renters and command a strong rent. There are good deals out there...a good supply of homes and amazing interest rates.
Around and in the Washington, DC area is a great location to own an investment property as many people move for jobs (including gov't jobs,jobs with the embassy, jobs in political offices) internships and school. If these people are not committed to living in the area for a long period of time,then they would be great potential rental candidates for you.
It is a great opportunity to add a piece of real estate to your portfolio, as both a place to live and a place to rent our,if the timing is right for you and it also works for you financially. I urge you to talk with a lender and financial planner.
I'd love to talk with you and yours about the home buying process both as a primary residence and as an investment property. I am here to help and always have time,greatly appreciate your referrals.
Life is good!
(o)301-718-4100 - ask for Adam
Licensed in MD & DC