It is important for everyone to take steps to diversify their investments. With the market cratering during the past few weeks due to the coronavirus (COVID-19) pandemic, many people are trying to seize this opportunity to jump into the stock market. While the stock market is a bit volatile and can be unpredictable, real estate is a safer investment. Furthermore, for those who have always wanted to invest in real estate, now might be the time to do exactly that.
During the COVID-19 pandemic, the real estate market has absolutely tanked. This is reflected in the falling mortgage rates that people can get if they are interested in buying property right now. The interest rate on mortgage payments is one of the most important factors in the price of a home. While many people tend to focus on the sticker price of a house, looking at mortgage rates is just as important. The difference between a good and bad mortgage rate could save someone hundreds of thousands of dollars over the life of a loan. Because mortgage rates are approaching historic lows, now could be one of the best times to buy a home.
If someone wants to buy a home during the COVID-19, there are going to be a few hurdles to consider. The biggest hurdle is that it might be hard to look at a home in-person. This is because shelter in place orders have been enacted for most of the country. Therefore, it could be difficult to find a real estate agent who is able to go out during this time. It will be important to touch base with a trained professional who is able to throw out some ideas to get around this hurdle.
Once someone has found an investment property, it is important to know about the two different ways this can generate income. The first comes in the form of rental income. By renting out the house, homeowners will be able to generate a steady stream of rental income that is going to cover the cost of the mortgage, real estate taxes, and utility bills. Generally, there is a significant amount of profit that comes from these rental payments as well. Those who might not live near the property they are renting out might want to enlist the help of a professional company that can find the right tenants.
The second form of income comes in the form of capital gains. Rental properties should appreciate in value over time. This means that when the owner goes to sell the property, he or she should see a nice profit. Now is the time to invest in real estate.