Now is the time to buy investment property

Following on from our previous posting last week about now is the time to buy investment property because there are some real bargains out there. The comment was raised about higher vacancy rates and lower rents. Yes that is true, and unless you are flexible and adapt to the times, you will find no property will fit that old formula for quite some time. Meanwhile you will miss out on some real bargains. So how does it work? Its simply a matter of putting the right things into perspective. Lets use an example of a newer 3 bedroom home which used to fetch $2100 a month in rent and you could pick up just shy of $400k. The cashflow wasn’t much but given it was newer then repairs and maintenance lower and if you managed it yourself then it really made sense. So You can pick up that same type of home now for $375k which is a huge saving of $25,000 right there. Ok rents have gone down, but just as a comparison, lets pretend you don’t even want to rent it out, no advertising, and just keep it vacant for a whole year. I know thats not likely but bear with me. 12 months of mortgage payments and other expenses is still less than $25k, so deliberately keeping it vacant and not having any worries if it will get rented or not still puts you ahead of those other investors who bought the same home a year ago. So if you were now to rent that same home for only $1700 a month the cashflow is break-even. Even though you are “loosing” $400 a month in rent, by buying at these discounted prices you are actually making thousands of dollars. I have simplified the example so if you would like to discuss further, drop me a line.