In case it bears repeating, now is the over-inflated prices, but today’s still appear to be in a downward
time to obtain a fixed-rate amortized bargains can make a cash-flowing spiral. Only buy in stable areas.
loan. There is no reason to take on rental realistic once again.
the risk of an adjustable rate mortgage Further, tenant demand for rental 2
If you’re buying a personal home, be
sure to plan on living in the house
when interest rates are at historical properties is on the rise. And with for at least the next three to five years.
lows. Also keep in mind that lenders foreclosure filings up 57 percent and
are going back to more traditional bank repossessions up 129 percent 3
When buying real estate as an
investment, be certain the property
underwriting requirements in light over last year, according to RealtyTrac, cash flows, with rental income exceed-
of increased delinquencies. This the rental demand is likely to increase ing expenses such as the mortgage,
means tougher restrictions on the further as people who have lost their taxes, insurance, and other costs.
amount of the down payment, proof homes to foreclosure look for alternative
of income, and credit scores will places to live. 4
Finally, analyze your economic
stability and only buy what you
make obtaining a loan more difficult. And most people who find themselves
can comfortably afford. Keep at least
Federal Housing Administration in this situation will be forced to rent
three months of living expenses in
(FHA) loans, seller financing, and for five to seven years before they can
reserve in preparation for that fabled
lease options are on the increase qualify for bank financing to purchase
rainy day.
as alternative financing options their own home again.
With a little common sense and
to conventional loans.
thorough homework, you’ll likely find
Making the decision that now is a great time to consider
No. 5
rental Although there are compelling buying real estate. Markets are cyclical,
opportunities reasons to consider buying real estate and the current combination of low
As overblown real estate prices begin now, it is always important to weigh prices, high inventory, low rates,
to deflate, investors will find they can the pros against the cons. motivated sellers, and increasing
begin collecting rents that cover all To help alleviate indecision, follow rental demand make it a buyer’s
their monthly expenses. It was difficult these rules: market for bargain shoppers.
to find and purchase a rental property
that would cash flow at the previously 1
Look at values in the local area to Tracy Z. Rewey can be reached at
see if they’ve stabilized or if they
tracy@diversifiedinvestment.com
Sometimes itʼs just great
“
to know that there is
someone else out there
that can handle
contractor financing.
”
Working capital for contractors working on public works projects
Contractor Resource
®
– Contractor Financing Program
Resource Monitoring Service
®
– Contractor Funds Control Program
To find out more about our Contractor Financing Programs,
call us toll free at 866-223-6994 or visit us online at
www.rmpi.net
Offices in New York, New Jersey, Texas, Massachusetts & Pennsylvania
growingwealthmag.com I Growing Wealth I July 08 I 33
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