Here are seven compelling reasons to invest in residential real estate as an alternative to such traditional investments such as stocks and bonds at this time.
1. Mortgage interest rates are low again— The beauty of investing in real estate is leverage and when interest rates are low it creates infinite opportunities to own residential real estate.
2. The high volume of recent foreclosures— There is a large number of former home owners displaced by foreclosure creating a large market of renters. This creates an opportunity for investors to purchase rental properties without the burden of the mortgage payment.
3. People prefer houses to apartments— If an individual has owned a home they might feel it is a step backwards to move into an apartment. General these individuals will make better tenants as they usually treat a rental home like they did their own home.
4. Tenants often prefer private landlords— For some it’s the security of knowing that only their landlord has the keys; but for others they feel there is an opportunity to eventually purchase the home through a lease with option to buy or lease-purchase agreement.
5. Real estate prices are low—In many major metropolitan markets there are pockets of residential real estate is pretty cheap. Consider investing in those areas.
6. The short sale market—It’s a great opportunity to get a non-foreclosed home at a great price. Plus you will have an opportunity to learn about the home from the home owner.
7. Real estate is a great long-term investment – Regardless of cyclical market conditions residential real estate is still higher than it was 30 years ago and with tenants paying the mortgage a profitable investment.
Investing in residential real estate is not without risk but these seven reasons create a positive foundation to profit from the favorable current economic conditions.
Edward Boyle
CEO, Employing Broker
Katchen Company
Katchen Company, founded in 1962, is an integrated real estate company with its corporate headquarters in Lakewood, Colorado. The company offers real estate development, redevelopment, property management, brokerage, consulting services, construction oversight and maintenance services to individual and institutional real estate investors throughout the greater Denver metropolitan area in Denver with satellite offices in Chicago, Las Vegas and Miami market areas.
