Despite Surface Signs, 2014 Looks to be a Stellar Year to Start Investing in Real Estate
Good signs are popping up everywhere in the housing industry. Foreclosures are disappearing, millions of people are no longer underwater on their mortgages, household creation is rising, and home prices and mortgage rates are rising – all indications that the housing market is truly turning around.
It isn’t time to sing victory yet, however. Home re-sales have not risen to the degree the industry hoped for. The promising gains made in 2013 have sputtered a bit in early 2014. Rising home values and climbing mortgage rates are pricing some potential homebuyers – especially those buying for the first time — out of the market. And lenders are still tight-fisted with their money, making a loan hard to come by for many.
On the surface, the housing trends don’t seem all that helpful for investors. With foreclosures drying up across the nation, the inventory of truly profitable homes for short term investing is limited, especially in warm climates. And reluctant lenders make purchasing a bit more difficult.
In spite of these factors, however, this is still a great time to be an investor. Opportunities are still available for short term investors. There are still properties out there – you just need some determination, and the willingness to dig deep and think outside the box.
Since fewer people can buy homes, many properties are sitting on the market vacant. This means motivated sellers. There are also many motivated cash buyers out there. The two together create a perfect opportunity for wholesaling.
This is truly a great time for investors to start thinking long-term, and turn their attention to cash flow properties. Rents are increasing around the country. Higher numbers of people who can’t get approved to buy a home means higher numbers of renters. In fact, rental demand has recently increased, and are expected to increase for the foreseeable future.
Higher interest rates, higher home values, and the overall upward turn of the housing industry means a potentially high profit margin in the long run. What’s more, renting gives you the security of having your mortgage paid each month, and the potential for a sizable passive income, particularly if you own multiple cash flow properties.
Smaller investors can find ways around stringent bank lenders. Private lenders are a viable option, especially in a climate of an improving real estate market. Larger investors are increasingly willing to finance smaller investors. And of course, there are always cash buyers
In the end, every market and every year is unique. The most successful investors are those who are most adaptable and most determined. We can help give you the right tools and set you on the right path for what looks to be a complex 2014.