By: Nick Stratton
One can not look into the future without thinking about investing. We invest many ways including education to increase knowledge and power, health drugs to extend our years and even in clothes we wear in order to be noticed or perceived in a particular way. Many times these things are done very casually, with little or no thought.
However, when placing our assets in “typical” investments, we are generally more cautious and take more time deciding where to invest our money. Questions and skepticism arise such as, “In which avenue do I put my money?”, or “What will be the return on my investment (ROI)?” and “How much risk is involved?” When investing in Real Estate, the answers to these questions are often uncertain. Yet the timing of investing in Real Estate can help resolve concerns related to these questions.
We are in the middle of one of the most difficult economic times this country has known. However, for those able, it is also a time of great opportunity. According to a KPHO article from January 20th, the Phoenix area had 4,500 foreclosures combined in the months of November and December.1 This does not account for the short sales that have taken place in today’s market. The number of distressed home sales has driven property prices down, making home buying extremely affordable for big and small investors with mortgage rates at such incredibly low rates. Today, investors can lease a home for a greater amount (positive cash flow) despite the mortgage, taxes and insurance.
This window of opportunity with an abundant supply of foreclosures and short sales will not last forever. A recent article in the Inman news website stated that foreclosures in California, Arizona and Nevada had actually declined in 2010.2 Although the last couple of months show a large number of foreclosures; eventually the market will return to normal. Indeed we are bouncing along the bottom of the market. Translation: Invest in Real Estate now when it’s more affordable than ever to minimize your risk and increase your ROI.
1-Berry, Jason. “U.S. Home Sales Skyrocket – Valley News Story – KPHO Phoenix.” Phoenix News, Arizona News and Local Weather from KPHO CBS 5 News. 20 Jan. 2011.Web. 24 Jan. 2011. <http://www.kpho.com/valleynews/26564890/detail.html> .
2- “Foreclosures Ease in Arizona, California, Nevada | Inman News.” Real Estate News for Realtors and Brokers | Inman News. 19 Jan. 2011. Web. 24 Jan. 2011. <http://www.inman.com/news/2011/01/19/foreclosures-ease-in-arizona-california-nevada>.