The Wall Street Journal recently ran an article outlining typical mistakes that first time rental housing investors make: Six Mistakes Housing Investors Make. The points made in the article are fairly common sense but definitely worth noting, and they should be helpful to a first time investor or even just to someone toying with the idea of buying their first rental property.
Many people that are doing well financially these days are looking for sound places to invest and are noticing that now may be the right time to invest in some rental properties as rents are on the rise, and renting (versus buying) is becoming more popular. With interest rates near historical lows, an investor who puts 25% down can get rates in the mid-3% range on a 15 year note, which is pretty darn cheap money. (I’m not a lender so don’t quote me on these numbers, but they are good rough estimates. I know some really great lenders I can point you to if you want to talk specifics and how you may be able to finance a rental property). There are properties out there you can buy right now where you can cash flow with your rent even after your PITI payment (Principal on your note, Interest in your note, property Taxes, and property Insurance).
Although we are experiencing low interest rates right now, they will trend upward in the future. Historically, as interest rates rise, property values increase. This means that we appear to be at a point in time where you can borrow money cheap now, buy an investment property that cash-flows (or breaks even) for you short term and should appreciate in value as well long term.
If you are interested in buying investment property or just thinking about it and want to learn more, please feel free to send an email to Z Real Estate (info @ z-realestate.com) to discuss investment opportunities and to request to be added to our Investment Opportunity email list.