Dare to invest

| Thursday, September 9th, 2010 | No Comments »

I realize that most of us don’t have a lot of extra cash laying around these days but if you do and its burning a hole in your pocket, here’s a thought. Invest in real estate. Like I’ve said before, now’s the time to buy! Everyone knows that home prices are low but did you know that interest rates on investment properties are also low? By putting 25% down you can get a 30 year fixed loan at around a 4.875% interest rate. In case you didn’t know, that’s a screaming deal!

What’s so great about having an investment property anyway? Well for starters, depending on what kind of property you buy, there is potential to have your entire mortgage payment covered every month by your tenants. In some cases you could even make a profit every month. Imagine that! (I hope I’m not beginning to sound like one of those cheesy ads that claim you can sit on your couch and do nothing and still earn a decent income every month!) Areas that do well in a rental market are usually in a large metropolitan area (like downtown Seattle), areas that are close to a big university where student housing is necessary (like the University District) or areas that are close to a major corporation (think Redmond and Microsoft).  And in the future when you’re mortgage is (hopefully) paid off, you can still draw an income every month. Even though buying a rental property is typically a long term investment, buying it now in a down market gives you a greater chance that your home will once again appreciate over the years.

Having a rental property sounds like so much work! Well it can be but so is having kids and people do it all the time! If you are thinking of doing it yourself here are some tips. Advertise (for FREE) on Craigslist. Once you have some applicants you can either perform a background and credit check yourself or hire an independent company to do it. I just BINGLED (my new term for Bing + Google so as not to offend anyone who is loyal to either one!) background check for tenants and came up with 3,910,000 results. Then either teach yourself some handyman tricks or go out and find a good handyman that you can call when problems arise. If you would rather not get involved in any of it, hire a property management company (ask me for referrals!) They typically charge a full month’s rent to get your place rented and then usually 10% of the monthly rent for the duration of your tenant’s lease. See, easy as pie. And don’t worry, there have always been renters and there will always be renters out there no matter what the economy is doing.

If you are interested in finding an investment property or want a good idea of how much one could rent for, don’t hesitate to ask! Just promise to think of me when you are sitting on your couch doing nothing but counting your piles of money that you are earning from your investment property!

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