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The Booming Real Estate Market
I know, you are saying, huh?
The title is only true if you have the money to invest, so that applies mostly to the upper middle or high class rung. With homes at rock bottom prices, it is a great time to pick up a home as an investment assuming you maintain it etc. Or, maybe you are trying to get your first home, there are sum good deals out there.
In Detroit, one can buy homes as cheap as $1000.00, even less. These homes in some cases are fantastic deals, in other cases, a fixer upper. Even so, one must also consider the money that will be expended after the house is purchased:
- Mortgage Payment
- Monthly property management fees
In this day of age, you no longer need to live close to your property. Many owners live thousands of miles away and pay a Property Management company to handle it all from finding and screening renters to making the repairs etc. Usually, it is for a percentage of what the rent is charged, say 6-8%.
Owning property far from your own residence does present its problems, especially when the renter or property management company is a problem. One can even handle most of the legal paperwork without ever personally seeing the property or meeting the RE agents in person. If you do your own research first, you can find a reputable RE agent, talk on the phone, and using overnight delivery, get the legal documents to sign and complete the deal.
While there are a lot of people struggling, in this economy, those who can afford to invest in other property are getting the best deals ever. Homes under $300K are selling quickly in the California market. Buyers pick them up, remodel or maybe not, and rent them out for considerable sums, usually enough to cover the mortgage payment, so it is a break even situation. When times get better, they will probably get a very good return on their money. those who bought a home for even $20K, will really score a profit. The downsides are if you buy and are unable to rent it out or sell. In this case, you are stuck with the mortgage, which may not be an issue to you.
So, if you are in a position to buy another home as an investment, go through all of the possible situations and their costs, from the worse to best case scenario.