June 22, 2012
My day in real estate
Perfect time for investing in this asset class. It's not so easy to find profits in the stock market right now - so most investors are rushing to hard assets like real estate and commodities.
I think investing in real estate now could possibly be a win-win situation, because interest rates WILL gradually go up. And therefore if I can lock in an interest rate at 4% today...I'd win and the banks lose. Monthly rental prices are near $750 - $950 in the areas I'm considering. My mortgage is estimated to be at $270/month after principal, interest, taxes, etc. This equates to my monthly profit (in this scenario) to be between $470 - $670. Not too shabby.
I imagine the rental market is going to be in strong demand since there has been a significant transfer of wealth given this past housing market downturn. A lot of people have lost their homes, damaged their credit, filed for bankruptcy, etc. Not too many people have questioned why the credit bureaus have raised the bar on FICO scores, however, more people now have bad scores due to the downturn in the economy and the result of this is that people cannot get decent mortgages to purchase a home. So for now, they rent.
So therefore, I think that due to this unfortunate event - there might be a silver lining for those of you who have the gusto to take a risk and make a profit.