Should You Invest in Real Estate?

It's been a turbulent time for real estate investing

. Regardless of your city, you have probably watched helplessly over the past few years as your house's value has declined. It has been painful, and because of this, many people are not eager to purchase real estate right now. People are running toward apartment rentals in droves, causing apartment vacancy rates to decrease and monthly rents to increase in cities across the country, including in Denver. Renting is often seen as the safer option, but is this really the right decision? Why should you consider purchasing a home right now? Here are a few reasons:

Interest rates: Interest rates are at historical lows. We may not ever see interest rates this low again, and you will be kicking yourself in a decade if you don't take advantage of this opportunity. Your purchasing power is greatly increased with the current rates. The average interest rate for a 30-year fixed rate is hovering below 4.5 percent. This rock-bottom rate will greatly increase your buying power. For example, the monthly payment on a $250,000 loan at 5.25%, once considered a low interest rate, is around $1380 per month. In contrast, the monthly payment $250,000 at 4.5% is only $1266. You can see from this example that the low interest rates will either save you money, or allow you to bump up your price range in your home search.

There are great deals everywhere. There is a great selection of homes right now on the market, and you may be able to purchase one of them for a great price. The high number of short sales and foreclosures on the market are priced well, but they also mean that regular homes will be priced lower to compete with them.

Tax deductible Don't forget that any mortgage interest and property taxes that you pay on your home are tax deductible.

The real estate slump is only short-term: Believe it or not, this slump will not last forever. If you are looking to live in your home for a short time period, or you are really concerned about keeping your monthly payment low, buying may not be for you.

These are just a few things to think about as you consider purchasing a home. Find a trusted real estate agent, who will help you decide if purchasing a home is the best financial decision for you at this time. We wish the best of luck in your home search!!

Should You Invest in Real Estate?

By: Kristen Schaefer

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