In recent weeks, we’ve seen interest rates skyrocket, home prices slashed, crypto market caps smashed and belts tightened with threats of recession looming. In the turbulent times, where do you put your money as an investor? I argue that the golden nugget is still real estate.
- The Value of Real Assets: As opposed to stocks, crypto and other investments, real estate always hold a unique measure of value because no matter market conditions it continues to be a place to live (or work if referring to commercial real estate). During tough times, wise real estate investments are resilient as they can continue to cash flow and during economy booms they thrive as rents continue to rise and investors get a chance to take profits. During this wild economic time, Real Estate’s unique position allows it to be a continuing good investment.
- Prioritizing Cash Flow: When searching for an investment property, this must be answered: Will it cash flow? Investors finding a cash flowing investment now, can expect that investment to appear more and more attractive as the years go by as rents naturally increase and rate lowering refinances become available. There are still many cash flowing investments on the market today.
- Focus on areas with projected growth: With the interest rates hikes and home price discounts, investors are seeing incredible opportunities in front them. Areas in Utah that have experienced intense bidding wars now see few capable buyers and have been forced to drop prices. For instance, in Santaquin, Utah, a town that has been massive growth in recent past, DR Horton has been building hundreds of townhouses and single family homes in an up and coming area. A large grocer and food plaza has been announced nearby and by all indicators this area should thrive and rise quickly in property values. DR Horton, due to growing inventory has lowered prices by 20k in the last two weeks. Don’t have much cash? DR Horton has a special program to give buyers a 4.99 apr rate as well as covering 5k towards closing costs making it possible for investors with limited resources to still invest. This is just one example of unique opportunities being created with the current market conditions.
- Prices low, rates high. Can a deal be had with plans to refinance later? If you believe feds will lower rates in the next 3-5 years, traditional mortgages, ARMs, and assumable mortgages can all be great tools to help you take advantage of discounts being seen on the market. Snagging a low price with a plan to refinance later may be too speculative for some but offers a big payoff for those willing to weigh the risk.
AJ is a licensed real estate agent in the state Utah and works with ERA Brokers Consolidated. He is BYU graduate and also works in public schools as a school psychologist when he isn’t working on a real estate deal. AJ has personally built nearly 40k in passive income in the past 4 years from his real estate investments while working on an educator salary and would love to help you do the same. Call or text AJ at 435-619-3465 to talk real estate.