Have you Considered Purchasing an Investment Property in the Treasure Valley? Nine Reasons to Become a Rental/Investment Property Owner:

Have you considered purchasing an investment property in the Treasure Valley?  For some, real estate investing is a compliment to traditional investments like mutual funds, bonds or the stock market. Have you heard the saying “Buy low, sell high?”  The next ten years of real estate in the Treasure Valley might not yield a better opportunity than now to purchase an investment property.  Real Estate prices are low and many existing homeowners are choosing to rent.  Here are the top nine reasons why you should consider buying an investment property through your Windermere agent in the Treasure Valley:

1. Diversify Your Investments: Owning your own home is a step toward diversification, owning investment real estate is a step toward protecting your assets from volatility in many areas of the market.  With all financial investment comes risk.  Talk to your financial advisor to see if real estate investment is an opportunity for you.    

2. Windermere Property Management: Windermere Capital Group now offers property management services with the Windermere value, trust and professional atmosphere you expect.  Windermere Property Management will professionally manage and protect your investment, making it our first priority.  Windermere has a high level of management standards in the industry and we will help you with the whole process from finding the right tenant to marketing and maintaining your property.  Our creative programs benefit, tenants, agents and most importantly landlords. 

3. You don’t need a lot of Money to Start: Many people believe that real estate investment is only for the wealthy.  Real Estate investment is typically available for purchase with 20% or less down, backed by a mortgage.  In some instances, sellers are willing to assist the buyer with costs.  If you purchase your first home and refinance once you have built up equity, you can leverage that capital for a down payment on a rental property.  Some homeowners are even offering seller financing to help you make that investment purchase.  Talk to your mortgage representative to find out what financing options are available to you.   

4. It can be a Second Income: Real estate investing can become a part time job and offer second income.  In a low market like we are experiencing now, many rental properties offer instant monthly cash flow.  I have come across listings that have homeowners ready and willing to stay in the home and rent the property from the investor immediately upon closing. 

5. You Gain Tax Advantages: Real estate is one of the most favored investments from a taxation standpoint.  With a real estate investment you can deduct expenses, depreciation write-offs, tax deferred exchanges and favored capital gains tax rates.  Owning a rental is a business, and tax laws allow deductions against your rental income.  You can deduct expenses like payroll, property management, advertising, maintenance, utilities, insurance and property taxes.  Tax laws change from year to year, so always discuss tax situations with your accountant and attorney. 

6. Real Estate Holds its Long Term Value: For some homeowners selling at the moment, it is hard to believe that real estate can hold its value in the Treasure Valley market.  In the long-term, real estate is a cyclical value and can change during any given year.  We have all seen the ups and downs of real estate over the years, yet in the long-term many manage to make good money from equity buying and selling homes.  Many invest in the stock market, yet it goes up and down all the time.  Historically, those who invested 35 years ago in the stock market and rode out the lows and highs have seen great returns.  If you hold on to a property 30 years and have a renter pay off the mortgage for you, you are most likely to walk away with equity if your investment is worth anything…which all real estate has value.  Even in the current market, if you purchased a home and paid it off over the past 30 years you would walk away with equity. 

7. You get Leverage: If you purchase an investment property mortgage at a particular interest rate, over 15-30 years, as long as your return/appreciation exceeds your interest rate, you are in a position to gain on your investment.  Leverage allows for creative financing that will allow you to grow your investment pool and create returns in the long-term.

8. You get a Positive Cash Flow: In some cases rental property might not cash flow for the first two to three years.  If you are fortunate to find the right properties, you could potentially cash flow in the first few months.  In the long-term, once an investment property is paid off, you have the potential to have pure monthly cash flow minus your taxes and management expenses.  In some cases, the tax advantages pay for the taxes.

9. It can help you Retire: Creating long-term investments can allow for a better retirement when your properties cash flow more with a paid off mortgage.  Just imagine having monthly cash just from sitting on a few homes you purchased years before.

If you are interested in real estate investments or looking to buy or sell a home in the Treasure Valley, I would be happy to help you achieve your real estate goals.  Email me at cbaldwin@windermere.com today to find out more information.  Happy Buying!   

Follow me on Facebook at ‘Chris Baldwin Real Estate’ for more information on the Boise market!

A great resource for those of you who are new to real estate investing: ‘Property Management for Dummies,’ Griswold 2001.

Follow responses to this entry through the RSS 2.0 feed. Leave a response, or trackback from your own site.