The 4 New Real Estate Rules You Need To Know
The housing market is always changing, especially during the past couple years. And through these changes, rules have altered which you may want to make note of. Here are four new real estate rules for you to keep in mind if you want to be successful in the current real estate market.
No More Big Housing Price Jumps
In today’s market, every borrower now needs a job and a down payment. Unlike before when borrowers were given an ARM mortgage to allow them to “leverage up” to a more expensive house payment, only basic loan types are available, such as 30 and 15-year fixed mortgages. So in short, if you buy a home now, don’t expect a huge increase in home prices.
Find the Best Deals in New Places
You can find great deals in foreclosures or short sales, however most of them require a bit of fixing up which means unexpected costs. Instead, you should look for a property where a seller has plenty of equity but is in a neighborhood full of foreclosures. This way, you’ll get a deal on the house, since the seller has to compete with his neighboring foreclosures, but you won’t have the maintenance that buying a foreclosure would have.
Focus on Income if Investing
Experts agree that it’s a good time to buy investment properties. If you plan on buying multiple investment properties, focus on how much income you can get each month through renters when considering a purchase. For example, a foreclosure worth $75,000 with a $800-$1,000 per month rent is a great return on investment.
Think Medium Term at Minimum
When you buy an investment property, don’t assume you’ll be able to flip it in a matter of months. For each property you purchase, make sure you have a seven-to-ten year plan in order to make sure you don’t lose money after you factor in the costs of the sale.