According to an estimate from the census bureau – US homewownership rate was 64.7% in 2nd Quarter of 2014, a decrease of .1% from 1st Quarter and .3% decrease from same time last year. . .it was the lowest rate since 1995.
If not buying, then consumers must be renting – right?
Investors have an amazing opportunity to see strong returns on their investment (ROI) in the single family arena. . .but according to NAR (National Assn of Realtors) 16% of all transactions so far this year were from investors, down from previous years. . .why you might ask. Well I think right after 2008 many loan programs available to investors were tightened or removed all together. Limiting their ability to finance single family homes. Also there was a huge influx in foreclosures and may of the investors paid cash for these foreclosures and then flipped them.
Accourding to the Harvard Study that was done and posted June 2014 (this is their 26th year of putting together “The State of the Nation’s Housing) – here’s the link http://www.jchs.harvard.edu/research/publications/state-nations-housing-2014
Strength in rental market continues to be a bright spot. . .we are seeing a shift in housing formation – not just single people renting, we are seeing families renting too (maybe due to an affordablility issue or maybe a credit situation stops them from buying). This is a great opportunity to introduce Investors buying property to consumers wanting to rent until they are purchase ready. Maybe consider doing a rent to own. . .we can how the investor and the new homeowner how the return on investment would look. . .
We have financing options available to investors with 20-15% down depending on credit scores and the current interest rates are only .75 – 1% higher than someone buying as their primary residence. We also have renovation loans available so that investors do not have to use their capital for the improvements. . .again 15-20% down programs available – streamline rehab and full renovation loan programs available.
Did you know ? When buying a property as an “investment” – you can obtain financing anytime during the life of your ownership so long as it was purchased as investment and you are using it as investment. When you are buying a primary residence and pay cash – you only have a 90 day window (according to IRS) to secure financing and have the interest tax deductible. . .with investment purchase if you pay cash – you can get financing anytime – the 90 day window is waived.
Also you can do a 1031 exchange that allows you to defer the capital gains tax on the sale of the investment property – click here for a review of how the 1031 exchange works and “How to Benefit from a 1031 Exchange”.
Hope you found this information useful. You can contact any of our experienced loan officers at www.directorsmortgage.net
Have a blessed day!
Peri Henderson, CMPS, NMLS#121326
*Information deemed reliable but subject to change without notice. Qualifying buyers only, subject to credit approval. This is not a commitment to lend. Call for details. Consumer Loan License NMLS-3240, CL-3240
**I am not a licensed CPA or Attorney and this does not constitute legal, tax or financial advice.