Thinking of Buying a Luxury Home? Now's the Best Time!
Luxury homes offer a good return on investment if you're able to buy them at a low enough price. Unfortunately, they've been overbought for years, which lead to many developments filled with houses that nobody could afford. Some homeowners sat on their properties for years in the hopes that they'd be able to sell them at a good price.
In many cases, that was a losing proposition because they ended up stuck with large property tax bills in the process. With inventory on the rise, prices have now begun to drop, which is turning the tables on real estate agents and making the market very attractive to buyers.
If you've been thinking of buying a luxury home for a while, then don't wait because this is the best time to do so in years.
Raising Funds to Invest in Luxury Homes
You may have wanted to get out of your current dwelling for some time. If you've lived in an apartment or a manufactured home, then the monthly mortgage you pay could be less than the rent you have to fork over on a monthly basis. Those who are living in a detached home could refinance mortgage payments they currently owe and save a bundle. Interest rates are so low at the moment that these homeowners could lock in a low monthly fee for years to come.
Keep in mind that once you've refinanced, you can usually keep that same rate until you pay off the loan completely. Even if rates go up in the future, you won't see your APR increase. This has also helped to make refinancing attractive to those who are looking to buy a second home as an investment property. Those who are trying to raise a large amount of money for multiple real estate purchases might want to look into applying for a separate bank loan that they could then use to buy property.
If you go this route, then you'll want to keep an eye on the small print. Loan rates are lower than they have been in years too, though, so this is definitely the best time to make this kind of a move.
Making a Good Offer on a Pre-Existing Home
Since market pressures have helped to drive prices down, you might be able to get away with making a lower bid than you otherwise normally would have. Vacation home prices are at near record lows judged against inflation, which has made it very easy for investors to place low offers in areas that are traditionally prime territory for snowbirds.
While you don't want to offer such a low amount of money that you insult the existing owners, don't feel afraid to cite a price that's below what the house would normally go for. People who are afraid that they might soon be underwater or are risking foreclosure might be even more inclined to accept these offers.
Take the opportunity to visit larger homes in the off-season, since this is often the best time to buy. You won't have much competition regardless of what kind of offer you put in. Homeowners who really want to get out from under their burden are more likely to accept less during slower times of the year.
Navigating the Complex World of Real Estate Investing
Don't think that you can't get in on the action simply because you're a novice investor. There's plenty of luxury homes on the market that are affordable enough for even those who haven't ever made an investment this large before.
New home sales are still in a constant state of flux, so greener investors might want to avoid these opportunities. Look for existing homes that are distressed or otherwise held down in price for some reason. Sometimes a home is on the market at a low rate merely because it's been on the market so long. Don't be afraid to make the bank a counteroffer either, because in many cases they'll be willing to take less too.
While things might seem complicated at first, they're much simpler than you might imagine. Once you have a handle on things, you'll stand to benefit from the best luxury home buying opportunity in the last five decades.