Recently, I was checking in with a few of my old clients. They all had bought a home with me in the last year to two years and I was staying in touch with them to see how they were doing. I am happy to report all were doing well in their home and very content. The conversation then changed to a few of them asking the question about investment properties.
We see this line of thinking quite a bit. After all, once you are established in your primary residence, you may start thinking about your investments. I meet with my financial advisor once a quarter to discuss our plan and how we are doing. Most financial advisors will advocate you diversifying your investments. For instance, in my case, I have a goal to have XXXX amount of money in my SEPP and IRA’s by the time I am 55. I also have a plan to own five properties by then (I own two now). I expect to buy more real estate offices in the next year or two and I am to have income from profit sharing plans as well as dividends. This is all part of a plan to have a diversified portfolio.
I know that I am not the only one thinking like this and as such when my clients talk to me about investment properties, I tell them the facts. Like there may never be another time like this when you can buy an investment property at these historically low interest rates. Or the fact that the home prices have just started rising, so you better buy now before paying a lot more a year from now. Or the best fact of all, that vacancy rates are below one percent in Metro Denver. There is no question that the home will rent, that it will result in positive cash flow, and that you will get a long-term tenant at a maximum price.
The next question that comes up is, “Will I be able to find something, and what will I have to pay?” Finding something to buy for an investment property is not going to be easy in this market. That product is fairly dried up with the low inventory we are experiencing. The best chance to find a good rental will be between January and March. Few buyers will be trekking through the snow; less competition means a better chance for you to buy a diamond in the rough the minute it comes on the market.
If you would like to speak with me or my team about buying an investment property this winter, we would love to give you the facts.