Not too long ago, real estate was a real bargain. But is it still that way now?
As you might expect, I took the opportunities afforded by the marketplace to pick up several investment properties along with a new residence during the downturn in housing. Others around me did too.
Joel, the youngest producer on my staff, bought one distressed property as a rental with a 15-year mortgage. It costs him $695 and he gets $1,250 every month in rent. He also bought another property as a primary residence and took out a 30-year loan. He pays $840 on that, so most of his mortgage is paid for by rental income.
So now you’re thinking, “Well, what about me? Have I missed the opportunity?” In a lot of the country, the really screaming deals are over. But if you’re still looking for a primary residence, and you want to buy to stay put for 6 or 7 years, you’ll be happy you bought the home.
On the other hand, the era of flipping homes is over, except in rare cases like in areas of Florida, Las Vegas, and scattered places in the Midwest. But the era of easy pickings is over.
Also coming to an end is the thing with first-time homebuyers being crowded out of the marketplace by Wall Street synidcates who are coming in with cash to snatch up properties. Especially as we move into fall and winter.
So housing remains a good deal, as renting is getting more expensive. But you to need to own for half dozen years or more to make the math compelling to be a buyer right now.
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