Will Investing in Property Remain Affordable?

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Will Investing in Property Remain Affordable?

If you are hoping to purchase an investment property in the upcoming years, it is important to understand what might happen to residential mortgage rates. According to the Federal Reserve Open Market Committee’s meeting this summer, it is expected that mortgage rates will remain low for at least the next year, and possibly into 2014.

This summer, mortgage rates have reached new record lows, making it a good time for prospective landlords to purchase their investment properties. If you buy when interest rates are low, you:

  • Have lower monthly carrying costs
  • Might be able to generate a larger profit, as low mortgage rates can mean that those carrying costs fall below average rental prices
  • May be able to purchase a larger home, or a home in a more desirable rental neighborhood
  • Can put aside more money for property emergencies or invest in repairs and renovations that will improve the value and appeal of the home

Of course, there are other factors that come into play. After a low period, at some stage, mortgage rates have nowhere to go but up. Factor in the potential for additional costs down the road to determine if the property would be affordable to you if it were temporarily vacant. In order to ensure that the property remains affordable, you’ve got to think about what might happen in the future, rather than simply getting excited by the low interest rates. After all, an investment property needs to make you a profit while you’re renting it out to be worthwhile, and it should also offer you a return when it comes time to sell and move on to other things!

Posted by

Zach Devine, Marketing
RentApp.com (A Service of AppFolio)

 AppFolio Property Manager

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Mark Loewenberg 09/17/2012 04:15 AM
ActiveRain Community
property management tips

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