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Income Property Opportunities For 2013

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For a large amount of real-estate professionals, 2012 wasn't a fantastic year. We were still on a unpredictable manner towards the end of real estate market. This wasn't exciting news for all your investors planning to make profitable deals investing in real estate. But as we move deeper into 2013, it's becoming abundantly clear the tide is turning. Over the years, buyers were becoming familiar with getting the initiative. The marketplace was being a poker game with the buyer being owning all of the chips. Sellers are now able to reclaim not only the chips, but the pot too. We're stepping into a seller's market the place that the seller, not the client will have the unfair advantage. Opportunity is knocking and it's been quite a long time since investors could exploit current and future market conditions.

The bottomline is, supply and demand are coming up with problems that can be very profitable for investors. Pressure is building out there like it might be doing in a very volcano that's going to erupt. This is a great eruption though for professionals. When the bubble finally burst in 2008, it caused unimaginable havoc within the real estate market. For investors, it's being a bad nightmare which has been permanently engraved into your memory. This has been several years since "profit and real estate Inches went hand in hand for the seller. But that's what is happening at this time. Interest rates happen to be at many of the lowest levels we've witnessed. And when they're still really low, there is an upward trend that's becoming apparent. Unemployment rates seemed to be dreadful, nevertheless they too have already been improving. When you take both of these factors under consideration, it's not hard to see why need for housing is increasing.

Homebuyers (very first time and seasoned), along with real estate investors alike consider notice from the positive signals. The economy in general is additionally showing definitive signs of improvement. That is starting a great force which will carry on and push housing prices higher. A lot of the markets nationwide already are seeing prices commence to climb. This trend is only going to continue and will also become greater eventually. In a few sporadic markets which might be inland and national, exactely homebuyers making their monthly obligations to investors who may have a considerable stake inside the rentals are much higher. With additional payments to arrive, there exists greater cash flow available which may accelerate the interest rate at which you become profitable and expand your business. But like several positive things, this chance features a clock that's ticking down. If the clock runs out, your window to make some sweet deals has decided to close. Demand will ultimately exceed the interest rate where mortgages are increasing. This makes enterprise cash flow.

Real Estate Journey

For folks looking in from the outside, the property market can feel crazy and unpredictable. Real-estate professionals on the other hand realize that the market undergoes regular cycles. Some of these cycles are painful, while others can be very rewarding, as well as lucrative. The housing marketplace bottomed out 3 x in recent memory. It happened in 1975, once again seven years later in 1982. Skip ahead another thirteen years, and you will notice happen again in 1995. Each and every time though, the housing marketplace were able to recover. However the housing sector struggled in 1975, it recovered and was at its peak in 1979. There is a downturn again in 1982, but we hit another high reason for 1989. Just seven in the past in 2006, the housing market climbed into a peak again. Fluctuations are a regular component of the harder market.

These statistics should drive home the reality that nothing lasts forever. You can find good, even great times from the housing industry. There are also rough patches we have to tread through to be able to reach greener pastures. For 2013, the situation is searching for along with the economy should continue to improve. Growth will stay steady and consistent. In 2014, we will likely be entering another temporary recession. But in comparison to that which you just experienced, this really is nothing to think about and small potatoes in comparison. Growth should really grab in 2015, 2016, and 2017. Even though the opportunities are excellent right now, they're going to only get better of these several years. Next, the economy will likely enter another amount of pain in 2018 and 2019. Each of these predictions is based upon the cycles that always appear in the housing marketplace.

Occasionally all of the news appearing out of the housing marketplace looks like it's not so great news. This is a false assumption being induced by the media to get higher ratings. The truth is, within the next several years, there will be great potential for real estate professionals who are action takers. People that sit on the sideline and turn into undecided will lose out. But in case you play full out, the financial gain is going to be significant or substantial. Time is money and it all is dependant on recognizing each of the real-estate cycles. You'll want to realize that every seller's market gets substituted with any market. As a result a great deal of sense when you see it. If your buyer believes the seller gets the advantage on a regular basis, they will not be motivated to purchase - a minimum of not until the market shifts inside their favor once again. So we should instead keep things in perspective. With that said ,, by purchasing when costs are low, you will stand to produce a nice profit as things improve and more homebuyers go into the market.

The Outcome of Low Interest

Homebuyers will almost always be looking for the best bargain in any market. This is the rule instead of the exception. When rates are high, new or existing homebuyers will usually live there. Consumers who are renting will even have a tendency to continue renting as an alternative to obtaining a home financing on the home. Once interest levels fall however, homebuyers usually jump to the market in order to secure those lower rates. Uncertainty is probably the few concerns that could keep people from stepping into an attractive housing industry. Even if rates are low, if unemployment is high, and the overall confidence for the overall design is low, you may not see much movement. This is exactly what we had take place in 2012. Speculate we always progress into 2013, the unemployment minute rates are falling and rates remain suprisingly low. That is helping slow up the uncertainty which can be motivating a lot of people to get back into the housing market. Inflation is a step to consider. This will likely all push housing prices and interest rates higher because the economy is constantly on the improve.

The Tremendous Opportunity - Greater Earnings for Investors

Real estate may not be complete without graphs and charts to believe the specific situation. The graph below from really captures the essence of what we're saying. It shows us that in 2005, in the event the economy was chugging along perfectly, mortgage repayments were also climbing as a result of housing prices going for a big jump. Compared to 2007, 2008, 2009, 2010, 2011, and 2012, the housing bubble was getting ready to burst and lastly accomplished it. This caused home to fall in addition to home loan payments. These payments actually dipped below rent payments with an extended time period. But despite all of the negative conditions out there, investors took notice in the great chance to seize a few of the earnings.

Housing prices will keep increasing because the economy and housing industry both carry on and improve. As this happens, home loan repayments must also rise at a pretty fast clip. It's expected that they will surpass rent payments once again. This can be fantastic news for homebuyers trying to score quite a lot. For investors however, this implies cash flow will begin to decline. Now is the time for real estate professionals to get into the marketplace. Greater income as well as a housing marketplace that may only appreciate in value are two biggest reasons behind putting some skin in the game. By investing now as an alternative to later, the chance less difficult greater in making some very lucrative deals. One of many big influences in the foreseeable future housing marketplace would be the middle-agers. These are the basic folks who suffer from money in the bank and are in close proximity to retirement. Housing is required to become attractive investment because of this particular demographic.

House Values will simply carry on and Increase

CoreLogic released an interesting directory of February 5th. This report causes it to be specific that home prices have already been rising, not falling within the last 10 months. Since the economy is constantly improve, there's no reason to think that this trend won't continue. In case you are wondering when there is a precedent for this, it's the biggest increase from year upon year which has occurred considering that the last housing peak in 2006. Home prices should continue to improve and appreciate by an additional 3% in 2013, with a 2.7% increase in 2014. The trend is our friend right now and as the bigger economy continues to grow, the local economies across the country will as well. This will bring many homeowners back into the real estate market. One of the big concerns that has been keeping people from entering is job security. Even individuals with high paying jobs in growing fields have been concerned about getting laid off. This concern will continue to dwindle as the economy gets better. Enough time has also passed for many former homeowners to have the negative information on their credit report fall off. Foreclosures and bankruptcy had a major impact on a lot of people. With time, these black marks have fallen off and their credit scores have jumped. This makes them more attractive to banks for a mortgage on a new home.

Consistent Job Growth Beyond the Recession

Looking back at the recessions throughout the course of history, one thing is for certain; after each recession, there is always an upside with the overall economy improving. Companies begin hiring again, the unemployed become employed, and the unemployment rate always falls. This is like a scene from a movie that we've seen many times before. Even if we do re-enter a recession, or even worse a depression, the variables that contributed to it will be much different than they are right now. With each passing year, brand new variables are being entered into the equation. If history happens to repeat itself, which it often does, the result will be different due to the new inputs being plugged into the equation.

Renting to Become Popular Again

When the economy was really struggling, both the housing and rental markets took it on the chin. The recession forced many individuals to put off their plans for the future. Marriage and having children are two big decisions that got put on the back burner for a number of people. Renting a property goes hand in hand with these two big decisions in life. Instead of finally moving out after completing college, many graduates have found themselves moving back home and living with their parents. The recession has either prevented them from starting a career in their chosen field, or is keeping them from getting a job all together. Things are improving though and as we move beyond the recession, these individuals who have been forced to live with their parents will soon find employment. This will boost the demand for rental properties over the next several years. Life should steadily get back on track for millions of people who have been struggling. This is great news for them and their parents, but even better news for real estate investors and the overall economy.

How Real Estate Investors Can Work Smart

This is looking to be a very special year for investing in real estate. Our economy is still in recovery mode and we are nowhere near the peak of the market. This is a good thing because it means that investors have plenty of time to enjoy the market while it improves. Once it hits the anticipated peak for this cycle in several years, things will get worse and then get better once again. In the meantime, investors have a tremendous opportunity staring them in the face. Rental payments are still much lower than mortgage payments at this point in time. This is largely due to housing prices that still remain below true market value. But as the economy continues to get better, this will greatly change. That is why this is the ideal time for getting into the market. Cash flow is great and housing prices will only continue to increase. Many people are also getting ready to retire which will drive up the demand for new properties in 2013 and beyond.

Marco Santarelli is an investor, author and founder of Norada Real Estate Investments -- a nationwide real estate investment firm providing turnkey rental property in growth markets around the United States. "Real Estate Investment Outlook for 2013" was originally published on the Real Estate Investing Blog.

The post Income Property Opportunities For 2013 appeared first on CapStar Real Estate & Loan.


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