A new survey just released by Move, Inc., which hosts a network of real estate related websites, found that real estate investors are beginning the leap back into the market. This of course, is an excellent sign that people trust that the real estate market has leveled out and will continue to recover and grow in the next five years. In the survey, which asks investors about their current plans, 33 percent of them say they plan to purchase property between now and the next two years. Investors say they are looking for their purchase today, not rushing, but are ready when the right one comes along.
A strong majority of 62 percent of investors indicate they are paying greater attention to the home prices and values in their market. While 43.5 percent think it may be a challenge to find just the right bargain, 41.5 percent think it will be easier to sell their properties in the next six months. A confident 22 percent of investors expect prices to rise in the next six to 12 months, and the majority of investors, at 53.5 percent, expect prices to remain relatively the same.
A new road to ownership for the first time buyer?
Though this survey shows that those looking to make an investment are ready to seize the opportunity it also shows these buyers are not what we typically think of as “investors”. A surprising 27 percent of these investors indicated they would be buying a primary residence as their very first real estate investment, essentially they are first-time home buyers, but they are buyers with a plan for the future.
So are they “flipping”? (Flipping is a term that means they buy with the full intension of selling the house for profit, traditionally after some renovation and usually soon after purchase.) Well, it appears they are prepared for a slow flipping process as the market recovers and their investment increases in value over the next 5 years. The survey revealed that almost half, a whopping 49 percent of “investors” ready to buy in the next two years plan to live in their investment property until they can sell it at a profit or turn it into rental property.
More than half of those in the survey, 56.5 percent, plan to have their investment as a rental property and 28 percent plan to purchase vacation property to sell later on. The survey also found 30 percent of real estate investors are interested in buying retirement properties as an investment.
Though today’s market may seem challenging for some, it does offer even those new to investing a great opportunity and it seems that first time buyers may be looking at unconventional ways to enter the world of home ownership and increase their financial worth in the process.
With home pricing holding fairly steady and record low interest rates, there does not appear to be a better time to purchase a property with the intension of selling it at a higher price in few years. The key here is “in a few years”, but if a buyer has the time and patience it could pay off very well for them. And if during those years the investor/buyer takes on some upgrades or renovations, they could be among the new line of successful “flippers” that may emerge in a few years time with a nice profit on their investment.
The survey indicates the days of “flipping” a property for profit in a few months are gone, but for buyers with an eye on the future using their initial home as the first in a series of investments in real estate, it could be a stepping stone that many are looking for.
So what if you are ready to become an “investor”? First get qualified for a loan you can afford and look at properties you can see yourself, and your family, living in for the next few years. The attributes that attract you will attract buyers to your property in the future. Look for that appeal. If you are handy and skilled, look for a property that may cost you less but will require some upgrades or repairs. Top of your list is to get a home inspection so you know all that you are getting into. Keep in mind any repairs listed on the home inspection report that will need to be done in the next five to seven years you will probably have to tackle to get the most bang for your buck when you try to sell.
Finally connect with a Realtor you trust to guide you through the purchase and with whom you can turn to when it is time to sell your investment and find your next investment or permanent home.