Should I Invest in Boise Real Estate?Posted by Kevin Hughes on Thursday, July 19th, 2012 at 11:23am.
Information to Know Before Investing in BoiseInvesting in real estate is like of any other type of investment: it carries risk, but it can be quite profitable if everything goes right. Finding those factors is one of the most important ways to make investing positive for you. First, what is a bad investment? It can be simply said that bad investments produce negative cash flow, while good investment create positive cash flow. The two avenues for creating positive cash flow from an investment property are rent and appreciation. If an investment property for sell is going to be profitable, you will have to find a property that will appreciate well and fetch a decent rent, with low probability of vacancy. It’s critical to be realistic when you invest-- if you can’t pay for the property, it will be worse than not investing at all. You should be able to cover all your expenses with the rent, as the appreciation is a bit of a wild card, fluctuating considerably.
Boise Investment SituationThe popping of the housing bubble meant that the value of homes plummeted. With all the short sales and foreclosures, many turned to renting. According to the 2012 Second Quarter study by the National Association of Residential Property Managers, Ada County (Boise and Meridian) vacancy rates are at 2% and Canyon County (Nampa and Caldwell) is at 3% for single family and multi-family homes. This is below the national average and at historically low levels. Demand for rental properties is at a very high level. Interestingly, prices haven’t matched the increased demand--they are somewhat flat. Investment property for sell is a competitive market. Generally, investors look for homes between $100,000 and $150,000 with three bedrooms; however, there are investors who rent homes with up to five bedrooms. Housing values are still far below boom levels, but they are rising. You don’t want to be like investors who tried to jump in the market around 2008 because they lost a lot of money. You want to find a good time in the market for your home to appreciate. Be aware of parts of the city which will appreciate better, due to improvement of area, increased amenities, etc.
The Boise Investors Part
You will have to do your homework and you should have a realtor help you. Break down the costs of buying investment property for sale. Don’t forget to include closing costs, maintenance, homeowners insurance, and vacancy insurance. Unlike before, you will need to put down around 20% down to get an investment property for sale. Calculate whether a home will be profitable, leaving appreciation and tax benefits as bonuses, not something to count on. If you find a property where you will make money just from rent, then you have found a truly great property to invest in. Don’t wait too long; start learning more about investment today, and find a realtor to help you in your search.
Call a great Hughes Group agent today! 208.571.7145
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