Top 10 Reasons to Buy (6 - 10)

I continue with this post and now present reasons 6 thorugh 10 on why (and I really mean it) it is a great time buy real estate now, and throughout 2011:


6) Lender are lending (to qualified buyers)
What does 600 billion to 1 trillion buy you? Lower rates. It appears as though rates for 30-year mortgages will stay in the low 4's and may even drop to the mid 3's. Wow. The US will be buying its own debt in order to keep rates low. When people refinance and save on their monthly payment they have a tendency to transfer those savings to consumer goods and not the retirement plan which is good for the economy. Lenders are lending and with such low rates, they are starting to offer Quick Qualfiers (stated income) with large down payments and low down programs. If you have income, or a large down payment there is a lender for you.


7) Realistic and negotiable sellers.
There was a time when sellers thought they determined the sales price: comparable sales and market trends be damned. Now sellers can't ignore the REO down the street and buyers are too savvy to accept any price demanded by the sellers. Technology and transparancy has caught up with sellers looking for that one buyer who is blind to the marketplace. Depending on the cirmcumstance and motivation, sellers are willing to flex on price in order to close as agreed.


8) Real Estate still offers great tax breaks.
There is a saying that when it is cheaper to buy than it is to rent, buy. Barring the unforseen, and the politically dangerous, the major components of the monthly house payment will continue to be a write-off on your tax returns: mortgage interest and property taxes. For example, I am selling a lovely home for $400,000 that I could have leased for $2,000. With 5% down, at current rates, the total monthly payment is $2,686. But with the standard deductions at typical incomes, the net payment is $1,900...which is $100 less than the rental payment.


9) Your second home is within reach.
They have done studies (I assume agents who sell real estate in vacation areas) and found that the single greatest source of pride for a purchase is a second home. Although I personally don't own a second home, I can understand why: these people have already started their retirement prior to retirement. Rather than waiting to enjoy the mountains, beach or islands, start the experience sooner and immerse yourself in the lifestyle earlier. Bad markets hit the second home market hardest and prices in these areas is as much as 50% lower than the peak.


10) Add a rental property to your portfolio.
Few dispute that in the long term real estate will be a good investment. At these prices, with these rates, and with more potential tenants (you must now qualify for a loan and show income), you can find properties and units where th tenant will make the entire payment for you. There are dependable property management companies (may I suggest Progressive Property Management, my company?) that will take care of the all "ills" of rental properties: tenant interaction, maintenance, tenant acquisition. All you have to do is find a property with the right cash flows, use the tax benefit, raise rents when you can, and wait for appreciation.

There they are, the Top 10 Reasons to Buy in 2011. But if it is a good time to buy, then it can't be a good time to sell as well. It would seem they are mutually exclusive? But they aren't. Next week watch for my post, "The Top 10 Reasons to Sell in 2011".