28 May 08 Now is the time to buy.
The saavy investors know that now is the time to buy investment real estate. Never in history has there been a time when prices have lowered and interest rates are low. Mortgage interest rates are still very low, for anyone who remembers when interest rates were in the double digits you know that is true. Unfortunately, many of us have a short memory and have been spoiled by low interest rates for a few years now. If you wait until the real estate market hits “bottom” or you are trying to figure out just where the bottom is, you may turn a fantastic deal into a good or average deal. Even if prices do continue to drop (by the way some areas of Maricopa County have leveled off or are slowly turning around) the interest rate may be much higher when they do finally “hit bottom”. Here is an example of the numbers:
Loan Amount $125,000, 30 year, Interest 6.25% = Principal and Interest Payment of $769.65
Loan Amount $115,000, 30 year, Interest 8% = Principal and Interest Payment of $843.83
That is a difference of $74.18 a month. Who would like an extra $74 a month in positive cash flow? Many unsaavy investors that might be waiting on a lower price could be setting themselves up for future failure due to increased interest rates. Of course, I don’t have a crystal ball and no one knows what interest rates will be in the future. Many of the areas in Maricopa and Pinal Counties have homes that are already much lower that replacement costs. I guess it is possible that they may continue to go down in price but I doubt it can be much more. Good investors know that now is the perfect time to buy and hold for long term. Real estate prices will go up again. It may take a couple of years, but if you can buy it right now with low prices and low interest rates you can hold on to it for the long term. If you are interested in finding some of the homes that are below replacement cost please give me a call at 480-240-4773 or email me at Brewer Caldwell.
Thanks,
Bryant
Tags: Brewer Caldwell
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