Thinking about investing in residential real estate while prices and mortgage rates are still low? Here are four things you may want to consider doing in 2013:
Make a purchase. The powerful combination of prices and interest rates won’t last forever. In fact, home prices are on the increase. In terms of affordability, it will be hard to beat 2013.
Look for bargains. The lower the amount you pay for a rental — both in terms of the purchase price and the monthly payment — the higher your profits will be over time. How about a fixer-upper? These offer a low-cost entry into investing in the housing market. The less you pay for a property you plan to fix up and sell, the higher your profit. Just make sure you aren’t overpaying for a home that requires a high level of repairs.
Consider refinancing. Do you already ready own investment properties? If you have mortgages on existing rental properties, what rates are you currently paying for those loans? Depending on when you purchased the properties, you could be paying too high of an interest rate. Refinancing could save you money and increase your profits. Ask your lender if refinancing is right for you.
Take a team approach. Enlist the help of a good Realtor who has experience in purchasing properties as investments. A lender who is familiar with the unique aspects of lending on investment properties can be another great member of your team. Consider joining a local real estate investment club or enlisting the help of a trusted colleague or friend who has experience in real estate.