It’s a Good Time to Purchase an Investment Property

Millennials are Waiting Longer to Buy

In July 2016, U.S. homeownership rates hit their lowest percentage on record at 62.9%. What is the major cause of this trend? The dip in homeownership is most likely due to millennials waiting longer than ever to purchase their first home. Factors that influence the home buying decisions of the younger demographic are increased student debt, delayed marriage, and waiting to have children.

As a natural result, this has impacted rent and vacancy numbers across the state. According to the Colorado Department of Local Affairs, vacancy rates have been declining since the 4th quarter of 2016. At the same time, the average rent reached an all-time high of $1,292.50 in the second quarter of 2016.

Now is the Time

Now, with historically low interest rates, it’s the perfect environment to purchase an investment property. Whether you are looking to diversify your portfolio, or simply purchase a “Kiddie Condo” for your college-bound kid, now is the time to act.

The Benefits

Investment properties can offer many benefits that you won’t see with the stock market or mutual funds.

• Debt Reduction – Someone else (your renter) pays the mortgage down for you.
• Diversification – Owning Real Estate protects your money against wild swings in the stock market.
• Cash Flow – In some cases, you can actually make money above and beyond what it costs for your mortgage, taxes, insurance and repairs and create positive cash flow.
• Tax benefit – You can write off the costs of property taxes on an investment property
• Avoid Capital Gains – You can protect sales profits from taxes as you reinvest into another, more lucrative property.
• Leverage – Your money works harder for you in a real estate investment than it does in the stock market because you are leveraging other people’s money.