Friday, October 11, 2013

Opportunities In Real Estate Income Properties

Investing in real estate is nothing new. Real estate gurus like the famous Donald Trump at one end and Russ Whitney have sworn by the wealth building properties of real property for decades, yet when the market tanked a lot of skeptics took a step back and wondered just how powerful and wise their teachings really are. Today, with properties prices still at astonishing lows, combined with stricter lending criteria for income properties, there are more opportunities than ever. Here are three reasons why buying an income property can not only help your cash flow but help you build wealth over the long-term.

1) Depressed property values. Whether you are looking at purchasing a multi-unit property or a single home that you intend on renting out, depressed property values allow you to buy property cheaper than you ever could have imagined. As well, with low prices (some decent properties are still selling for under $35,000!) the property owner does not have to collect an exorbitant amount of rent to allow for a positive cash flow. Prices like these are so rare it is not unrealistic to believe they will never be seen again.

2) Stricter lending criteria. Although stricter lending criteria also means that someone investing in property will need more of a down payment and will have to jump through more hoops, it also means that if there is another real estate market correction, properties will not be "given away" for next to nothing. This will allow property values to appreciate more modestly than ever, but investors can rest assured that those price appreciations will not get wiped out overnight. This makes real estate a "slow but steady" wealth building asset, arguably a good thing.

3) Demand for rental units. Although there is a big vacancy rate when it comes houses, property investors should expect to see a short-term jump in demand for rental units, especially in some areas. With many people afraid of losing money in real estate as well as the stricter lending criteria where mortgage lenders will verify every piece of information you give them, a lot of people will fee more comfortable sitting on the sidelines and renting so that they can not only get a better "feel" for the "new" real estate market, but so they can rebuild their assets (remember, at least some down payment will be required by a mortgage now). This demand will help investors fill their properties and increase its cash flow value.

These are just three of the most obvious benefits to buying real estate for its income-producing benefits in the current environment. With a bit of thought and digging around, it will not take too long to realize just how rich today's opportunities are.

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