With Market and Interest Rates Down – Does That Mean Property Investment Is a Good Idea?

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So many people are wondering these days whether it is a good time to invest in property.  It’s no secret that interest rates are at an all-time historic low and when combined with the low housing prices we are still seeing these days, more and more people are considering real estate investment.

How can you tell if it is the right thing for you?  And if you do decide you want to venture into buying property for the sake of investment, how do you go about it and what type of dwelling makes the most sense? 

The answer is largely dependent on your individual investment goals.

Overall Appreciation Perfect for Long-Term Security
The easiest way to enjoy significant returns on investment is through the purchase of a single-family home.  Historically more popular, these properties are easier to rent out, entail less day-to-day management and they can be assumed as primary residence at any given time the investor would so choose, providing an added sense of security.  Home values do appreciate with time and single-family homes typically rise in value faster than other rental property types.

It is important that the property is located in a desirable location and also that it is easily rentable.  Your Realtor can assist you with an analysis of the area’s statistics in term of rent versus buy situations as well as a look at what other similar properties are renting out for.

Slow and Steady Monthly Income
Rental units that comprise of anywhere from 2 to 12 (or more) family units within the property are perfect for monthly real-time cash flow. While they may not appreciate as much as single-family homes, they provide the comfort and safety net of steady monthly income.  If increased cash flow is the goal then opting for multi-unit rental properties may be the best route to take.

Demographics play a key role in determining your investment.  For instance, if you live in a college town then a rental home near the college or downtown would be ideal for many senior or grad level students that prefer easy access yet quality housing.  Conversely, resort homes are also attractive and as long as they are located near some tourist attractions you may be able to yield decent rental income. Rental units in big cities are also popular in the more bustling areas of town.

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Given the increase of rental units and investment properties being rented out, there has been an influx of property management companies set up.  Ideal for the silent investor or someone that does not have a lot of time to put into the actual management of properties, property management companies handle anything from market analysis, finding and screening tenants plus managing the move-in process to handling day-to-day affairs like collecting rent or property maintenance.

If you can afford it and have investment goals that line up with some of the returns that are apparent with property investment, contact your Realtor to get a feel for what is available out there.  This is definitely a very interesting time to pursue an investment property.