Real Estate Investment: Is Now the Time?

After years of a tumultuous economy and a housing market that seems not to favor any participant, things are finally starting to recover.  As someone who wants to invest money and receive a good return on that investment, you must ask yourself where the best place to put your money is.

Two common investments are in stocks and bonds.  Though risky, these can provide returns depending on the market.  In 2011, stocks overall provided 2.07% interest according to the Federal Reserve database.  Riskier investments, if they work out, would provide more interest, though by their nature may end up losing money.

For a higher return, real estate investment is a very attractive opportunity.  Housing costs continue to be low during the recovery of the market, as are interest rates on loans.  This means a house bought today will likely be less expensive than if it is bought after the market fully recovers.  In short, now is the time to buy.

The returns you receive depend on a number of factors, the biggest one being what you intend to do with the property after it is purchased.  Generally, the options are rent, resell, or develop.

If you intend to rent your property, there are several things to consider.  First, renting requires a continuous investment in maintenance and care of the property.  However, anyone willing to spend the time and money necessary will find the market is favorable to landlords.  As inflation increases, rental prices rise with it.  Mortgage payments do not, so there is an increased cash flow to property owners.  Properties also tend to appreciate with time, so the value of the land increases the longer you wait to sell.

Resale requires less of a long-term investment, though the value of the property will not appreciate without alteration.  Buying a property and improving it or developing it before resell will drive the price up, and all that needs to be done is a cost-benefit analysis of whether each modification will increase the value of the property more than the price of providing that modification.  Buyers are increasingly willing and able to purchase homes, so a resale or development opportunity is likely to provide good returns.

Now is the perfect time to invest in real estate.  With careful planning and some expert advice, investors can hope to make a high percent return on their purchases.