My freshman year in college, I returned to my hometown to attend the wedding reception of a friend. During the festivities, one of the young men who had occasionally wandered into my social circle came over to ask me to dance.
He mentioned that he had always wanted to ask me out on a date in high school, but he was afraid that it wasn’t a good time or that it wouldn’t work out. So he put off asking me out until high school was finally over. I told him that I would certainly have gone out with him, and we decided to go out while I was in town.
We had a good time, and he regretted that he hadn’t asked me out sooner. And he told me he almost didn’t say anything at the reception. In the end, he just decided that he was better late than never.
That’s the point we’re approaching with the current real estate market. You might have missed out on the earlier chances to get in on rock-bottom home prices and record-low interest rates, but there remain opportunities to get into real estate right now. The boom is getting into its later stages, but it’s not over yet.
Even though mortgage rates have risen recently, they are still quite low. When I bought my home prior to the financial crisis, the best rate available was 6.02%. Rates aren’t that far above 4% right now. And, even though May 2013 prices jumped the most in seven years, there are markets where home prices are depressed. In fact, my neighborhood is seeing somewhat low prices, as compared to what we paid for our house.
Across the country, there are deals to be found. While real estate investors may no longer be in the prime situation we saw a couple of years ago, it’s possible to take advantage of the current real estate boom, whether you are looking to become a landlord, flip the property or even if you just want a property that you can hold on to for a few years in the hopes of reasonable appreciation.
If you still want a chance to get into investment real estate, here are some things to consider:
1. Look For Distressed Markets
Real estate is local. That means that you need to look for deals in distressed markets. One of the markets that some investors are looking into right now is Detroit. Even Donald Trump thinks that Detroit might make a decent investment.
But you don’t have to go to a bankrupt city to find good deals. Research markets, and look for places where home prices are low.
2. Buy A Fixer-Upper
Rather than looking for the best home on the block, try buying the worst home on the block.
Look for a place that has room for you to build value. Homes that are structurally sound but might need some repairs or upgrades to get them in “move-in” condition can be great investments. You can either flip the house (if you know how to effect the repairs in a timely and cost-efficient manner), or you can rent out the house while you wait for a further recovery in the housing market. Look for foreclosures or short sales, and you can really make the most of your real estate investment dollar.
3. Purchase Rental Properties
There are some great deals on rental properties right now.