Investor Driven Market
We all know that rates are at an all time low and these rates are helping the housing market. Right now there is just not enough inventory and buyers are having to “jump” on a property if they are interested.
What we are seeing or should I say “not” seeing in the background is the amount of sales being done by the investors most of the time paying cash for properties. All-cash home purchases (many of which are made by investors) made up 32% of sales nationally in March 2013, a significant rise from 20% in 2009, according to the National Association of REALTORS®
With Colorado still having a fair amount of foreclosures and/or short sales available, investors are able to come in and purchase these properties quickly. They are doing some minor repairs/renovations to turn them into rentals (which rental prices are on the rise) or they are reselling them at a higher price (fix-n-flip) because they have increased the value of the home.
For many of you looking for homes to purchase, buying a “fix-n-flip” home could be a great opportunity if you don’t have the time and/or money to put renovation costs into a home that needs a little TLC.
Another option to think about is purchasing these homes with a FHA 203k loan, an FHA mortgage that includes renovation costs. You can be the one who fixes up the home, allowing you to customize to your liking and needs. (I will post more info on the 203k next time, so look out for it)
Having the market being driven by these investors is helping with the housing recovery. Values of homes are rising. Industries are benefiting from the housing recovery such as Contractors, Landscapers, Painters, Home Improvement Stores, Interior Designers, Home furnishing stores, Floor covering stores and property management just to name a few.
If you are on the fence about purchasing an investment property, now might be the time to make that “jump”. Again, with the low rates and rental prices rising, this is a great time to get into the market as an investor.
If you have any questions or need some help getting started on purchasing a home, looking into a 203k loan or how to purchase an investment property, please contact me.