Wednesday, 23 April 2014

National Realty Investment Advisors Discuss The Promising Real Estate Investment Market

As National Realty Investment Advisors experts affirm, the real estate market has seen a drastic turnaround and now is a promising time to invest in residential properties. It can be intimidating to engage in the real estate market without prior experience. But with knowledge about the potential risks and benefits, prospective buyers can expect good things from their investments.                                                       

Real estate offers ample opportunity and promise compared with other types of investments, according to Entrepreneur Magazine. In today’s market, obtaining a bank loan and leveraging your capital is easy to accomplish when you’re buying a house.

Real estate investment offers specific tax freedoms that aren’t available through mutual funds and other investments. According to Entrepreneur magazine, in most cases, investors won’t pay taxes on their cash flow if capital is leveraged. They can also benefit from tax deductions that can be applied to other income. Additionally, investors can write off business deductions like travel expenses and other costs incurred to maintain properties.

According to Kiplinger finance advice, mortgage rates are at historic lows and buyers are feeling confident in the current market. Home values are looking strong.

Although the market can change quickly, National Realty Investment Advisors’ professionals agree. “It’s the best time to jump on the train,” said Dan Hirshout, Senior Project Manager. “With investment grade professionally-managed  new construction, you have built-in equity, top rents and with the 6-year-old Dodd Frank law regulating all appraisals and bank mortgage practices, (you have) the most stable realty market in 50 years.”

Jill Sjolin, a real estate agent located in Washington, told MSN, “We haven’t seen home prices this low in so many years, coupled with the rates being so low. When the money is cheap to borrow and the houses are cheap to buy, it’s absolutely the best time to invest.”

“Home values are stable,“ said Art Scutaro, NRIA Project Manager. “The lack of supply in the city’s empty lot environment means they have nowhere to go but up – due to the city’s demand trend of re-urbanization, there’s a low supply of lots.”

Before you jump into the market, you should learn about the potential opportunities and risks that it poses. Real estate is always a risky market, but some strategic decision-making can easily eliminate the chance of pitfalls. Forbes advises investors to start by looking for a property that doesn’t require a lot of time or management – two things that can be very costly. Properties such as college housing or vacation rentals are two examples that might fall into the high-maintenance property category.

Kiplinger suggests a few surefire ways to make a profit in the market. Flipping homes is a common strategy that helped some investors make a fortune after the housing bubble burst. It’s best to have cash when buying rundown properties, but keep in mind it is harder to get a loan when you’re buying a property that isn’t your primary residence. Plus, many of your competitors will make all-cash offers.

In a 2013 article, Daren Blomquist, Vice President of foreclosure-tracking website RealtyTrac, commented that house flippers “can do very well in a market where home prices are on the upswing,” and added, “That’s what we’re in right now in many areas of the country.”

According to Investopedia, flipping houses for profit requires strategy. Investors should look for homes that look worse than they really are, such as having cosmetic problems that are easily fixed. These properties are likely to have a small asking price and can easily sell for far more with a little bit of TLC. The next step is to look for sources of the lowest-cost labor and parts with the goal of minimizing expenses. Home prices are indeed on the upswing in many parts of the country, which is exactly what fixer-upper investors should look for when waiting for the most opportune time to buy.

The renters market is huge right now, which offers ample money-making opportunities for landlords and investors, suggest National Realty Investment Advisors’ real estate professionals. In fact, the rate of homeownership in the U.S. fell to 65.4 percent in 2012. That’s the lowest it’s been since 1996, based on Census Bureau records. Furthermore, apartment rents rose 4.1 percent in 2012 and the average interest rate for 30-year, fixed rate mortgages. These numbers add up to promising profit potential for landlords.
National Realty Investment Advisors Project Support Specialist Adam Levine adds, “The key is staying in the major growing Cities where people are flocking due to more job opportunities and the ongoing Gentrification Re-urbanization mega trends. Both young professionals and ‘empty nesters’ are flocking to the major growing cities like Philadelphia and New York because that’s where the opportunities are and all the energy and entertainment. Rents and values therefore have to keep moving up because there is nowhere to live.”

But even the smartest investors can fall into market traps, according to the investment consultants at National Realty Investment Advisors. Buying a property for less than it’s worth is always a possibility, but it’s avoidable. There are a few major factors to ponder whenever you’re considering a purchase. Pay attention to the quality of the neighborhood, as location will always determine market value. Consider the level of property taxes and whether this is something you can manage. The characteristics of the schools, crime level, job opportunities and amenities are also game changers.

It’s also important to examine the market in the surrounding area to get a good idea of what kind of value you can expect from your return. According to Investopedia, investors should check out the average rental rates in the local area and see if these will cover mortgage and expenses. Neighborhoods with an excess of listings and empty properties are probably not a good place to invest in.

With the housing market on an upswing of recovery, experts, lenders and market-watchers seem to agree that now is a safe time to invest. Investors have a slew of options that have the potential for strong profits in today’s market, including flipping homes and renting them out. Professionals like National Realty Investment Advisors and the Kiplinger financial advisors suggest that a long as investors avoid potential pitfalls and the market remains solid, real estate can be a promising avenue for investment.

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