With more than 100 million Americans currently renting property in the US, a recent fall in mortgage rates and an increase in housing starts, now could be a good time to think about buying some real estate. Whether you choose to let a rental property pay your bills, or hold on to a property as it gains in value, investing in real estate has the potential to generate wealth. Choose between buying property in established and prosperous areas with established infrastructure or, look for opportunities in up and coming areas where returns could be high.
Holding on to Property to Gain Value
There will always be fluctuations in the property market, but by sitting tight during the lows, you will profit at a later date from the highs. Recently, there has been an 9% annual increase in length of tenure because of owners with low mortgage interest rates choosing to remain in their properties rather than risk paying more when they move. While staying put, these homeowners also benefit from a steady increase in value in their homes. This then gives them the option of releasing equity at a later date, which can be a valuable financial tool to ensure a secure retirement.
Making Money From Rentals
If you buy additional real estate as investment, you can benefit from the regular rental income as well as watching the equity increase in your property. Of course, you’ll want to achieve the best return on investment. Check similar properties in the area to help work out house values and potential rental yields. In choosing areas with high employment levels, good local amenities and transport links, a rental property will quickly attract young professionals and families and rarely be empty in between tenancies.
Buying Abroad for Good Returns
While some investors like to keep their properties close in familiar areas, others are happy to widen the net and investment properties all around the world. Buying a property abroad can often be very much cheaper but looking for the best location is again very important. Property in some established, popular destinations such as Indonesia have rental yields of over 8.5%. At the same time, by keeping an eye out for up and coming holiday resorts and countries where infrastructure is improving, you could find a bargain that will grow in value.
Buying property remains a popular way to invest money and can generate significant income in different ways. While renting will bring in an immediate regular income, holding on to property could provide comfortable reserves for retirement.
About Mohammad Mustafa Ahmedzai
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