Why now is a great time to invest in Boise Idaho area homes and real estate...
Low Rates. The best reason for buying homes has nothing to do with the local market: Cheap long-term money! Interest rates for investors are near 35-year lows, according to Freddie Mac. These low rates combined with a below-market buy means positive cash flow is more attainable than it has been in many years. Monthly income, combined with the tax benefits and principle reduction- as your renters pay off more loan with each payment, ensures a decent return on investment, no matter how long it takes for prices to rise.
Low Prices. The median price for an existing single family home in Boise-Nampa Metro has fallen to a 4.5-year low. Long-term investors should see this just as they do with dollar cost averaging in the stock market- buy more when prices are down. Sales are yet to return to normal levels, when taking into account the population boom of recent years. The Boise market is poised for appreciation with a normal 6-month supply of homes in the Boise-Nampa Metro area.
Big Discounts. Nearly 30% of all homes listed for sale in the Boise-Nampa Metro are short-sales and priced for liquidation to avoid foreclosure. In my experience, these sellers will accept a low offer and then try to get the lien-holders to approve the contract. The lien-holders will most often try to work you up on price, but are willing to accept a 10-20% discount to avoid the costly foreclosure process. Don't forget foreclosed homes, which come with none of the uncertainty of short sales and are also priced to liquidate. Depending on the city, up to 10% of all homes listed in the Treasure Valley are foreclosed homes. The selection of foreclosures (REO) has never been better for new homes, under construction, homes with acreage, condos, townhomes, luxury homes, lots and income properties.
Best Time of Year for Bargains. Winter is always the best time of year to buy. The least competition of the year, combined with today's huge and growing inventory of foreclosures will translate into the best discounts in many, many years for those able to buy homes or income properties before March/April of 2010.
Fixer-uppers too! Contractors or investors with skills & time can create wealth by repairing/improving homes right now. Hundreds of foreclosures and short sale homes are available and needing repairs and sold as-is. Since the average home buyer will not take on major repairs or may be limited by financing, greatly reduced competition and an inherent discount make fixing homes over the winter a great way to make money and pay less in taxes than your job. And for you contractors, a fixer could be a win-win for you and employees kept busy and retained over the winter.
Got an Eater? That is, a rental property you have to feed every month? Many of my clients who invested during the boom bought homes with negative cash flow and, despite the tax benefits and equity build-up with each payment, were betting on appreciation and a below-market buy to make a return. With values down, there's no easy way out. Not a problem if you can afford to feed the investment until prices come back- and they will- the question is when.
My advice would be- buy one that does cash flow to offset the negative. I realize few people have 20-25% for a down payment laying around, but with stock values back up- think about converting some of your retirement accounts into a Self-Directed IRA to buy real estate. This would allow you to sell stocks high and buy real estate low. Your IRA can buy homes or income properties with 30% down and all the gains and income can grow tax-deferred.
Learn more about real estate investing: Single or Multi-family?, Live Auctions, Flipping Homes
Ask me for cash-flowing homes in the Boise area for rentals.
Or for money-making fixer-uppers.
Repoman always knows where the best buys are!
Dan Rowe ABR CRS GRI
Broker of Dan Rowe Realty
danrowe@cableone.net
(208) 866-3481
Dan Rowe has been licensed in Idaho for 19 years serving buyers, investors and sellers in Boise, Meridian, Eagle, Star, Kuna, Nampa, Cadlwell, Middleton, Mountain Home, Idaho City, Emmett, New Plymouth, Fruitland, Payette, Weiser, Homedale, Greenleaf, Wilder, Huston, Marsing, Melba, Bowmont, Ada County, Canyon County, Elmore County, Gem County, Idaho County, Tresure Valley and SW Idaho. Dan has earned the following designations: Accredited Buyer's Representative, Certified Residential Specialist and Graduate of Realtor Institute. Repoman also specializes in foreclosure properties including short sales, pre-foreclosures, foreclosed and repossessed homes and real estate; HUD, VA and Bank-owned REO.