Ready to Invest in Real Estate: Homework, Homework, Homework!
Note: This article is courtesy of Iris.xyz
By Michael G Rivas
We’ve all heard the mantra: “Location, location, location!” When buying an investment property, a great location is often considered the #1 rule for success. But as we’ve all seen in that late night, a drag-out game of Monopoly, location certainly isn’t the only factor at play.
A decade ago, we all learned more than we wanted to know about subprime mortgages. People were investing money they didn’t have using loans they should never have been given. The stage was set for the perfect storm. Home prices started falling, refinancing became difficult (especially with historically high debt-income ratios), and those previously attractive adjustable-rate mortgages began to reset at higher interest rates.
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Monthly payments rose dramatically and mortgage delinquencies soared. It’s the scenario that led to a shocking 3 Million foreclosures in 2009 followed by a complete overhaul of mortgage banking regulations. It took years for housing prices to climb back out of a deep, black hole—and even longer for people to recover financially and psychologically.
Prior to the housing crash, real estate had almost always been viewed as a solid investment, averaging over 6% for decades. Now that housing prices are on the rise, investors are once again turning their eyes toward rental properties. Many risk-averse investors gravitate to real estate as an attractive proposition. You can feel it. You can see it. You can drive by your property and know your investment is real. But is investing in property the right choice for you? The answer depends on one thing: the margins.
Click here to read the full story on Iris.xyz.
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