We are now approaching three months into 2017 and the real estate market hasn't looked this good since the late 1990's. Unlike the over exuberant boom that began this century and the resulting crash that followed, we are now in a well balanced market with stable interest rates and a logical but open mortgage market that allows buyers access to mortgage financing that is consistent and congruent with the local economies and work forces.
Everyone likes to imagine what they would do if they won the lottery, but a more practical exercise right now is to imagine the best way to invest the money you really have.
I believe the stock market is slightly overvalued and is currently reflecting an abundance of optimism based on events that may or may not happen. (Lower corporate taxes, repatriation of corporate cash held overseas and better job prospects and lower unemployment.) There isn't much room for continued growth, but there is plenty of room for leveling off or a minor correction in the market.
Real estate, however, is producing consistent 3%-5% annual appreciation as well as 6%-10% returns on rental investment properties. A perfect example is a remodeled two bedroom one bath single family home in St. Cloud available for $110,000. Purchased for cash and rented at the market rate of $950 per month, this little gem would result in a 8.1% net return after property taxes and insurance. On top of that 8% annual return, the home could probably be sold for $140,000 in four to five years which would realize an additional 20% return on the initial $110,000 cash outlay! That is a 12% return annualized over five years. I don't know where else those kinds of opportunities exist...legally :)
Anyway, owning real estate is "cool" again and, more importantly, profitable! Don't sit on the sidelines and be satisfied with the returns on CD's and money market bank accounts. Feed your capitalist instincts and create wealth for you and your family. You can also soothe your altruistic side and provide quality, affordable rental properties for deserving people who are just getting started. A true win-win situation!
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