Is Now the Right Time To Buy an Investment Property? How Low Rates Can Help Investors Increase Their Buying Power

Is Now the Right Time To Buy an Investment Property? How Low Rates Can Help Investors Increase Their Buying Power

With all the upheaval caused by the coronavirus pandemic, now might not seem like the best time to buy any type of real estate, much less an investment property or second home. But don’t rule out the idea completely.

“With historic low rates, it is a good time to consider investing in real estate,” says Victoria Shtainer, a real estate agent and expert at Compass in New York. “Low rates give you more buying power, and we have been negotiating amazing deals for our buyers.”

Mortgage rates are expected to drop again after the Federal Reserve’s recent rate slash, which was intended to protect against the economic impact of the pandemic. That means that it may be time for buyers to consider an investment property. Here are some reasons to go for it.

Why people are considering buying

The lowest interest rates in nearly 50 years, and the potential for a recession, which could lower home prices, have attracted the attention of buyers.

“Given the current volatility in the stock market, investors are reassessing asset allocations in their portfolio, and considering how real estate may fit into this from an asset allocation standpoint,” says Shtainer.

She says the current environment, with low rates and a good selection of inventory, has given investors the upper hand in negotiations.

“More people are looking to real estate as their next investment, because of the potential for both appreciation and cash flow,” says Jennifer Anderson, of Anderson Coastal Group in San Diego. “It’s also a real, tangible item that can provide more control than other forms of investment.”

Benefits of buying an investment property

An investment property can be a valuable asset and a good way to generate passive income, and it might also provide tax write-offs and incentives that you wouldn’t get on other instruments, experts say.

“We always recommend speaking to your qualified tax adviser on your particular situation,” says Shtainer. “However, generally speaking, there can be tax benefits to owning an investment property. This can be via the tax benefits that mortgages provide, as well as the IRS’ treatment of your investment/vacation home, depending on how you rent it out.”

Anderson says that holding a property with the potential for appreciation and cash flow is a huge advantage of buying an investment property. It also diversifies your investment portfolio and protects your net worth while the market goes up and down.

Precautions to take before buying

Buyers should prepare, however, for the possibility of a prolonged economic shutdown. If you’re buying a property that doesn’t currently have tenants, it might be a while before you can find any.

That’s why the most important thing to have on hand before you buy an investment property is cash, says Nick Clements, general manager of Mortgages at LendingTree.

He says that because investment property owners will be responsible for repairs and maintenance, for tenants not paying rent on time, or for the time that might elapse between tenants, they need cash to cushion any bumps in the road.

He also advises buyers to research the appropriate legal vehicle, typically an LLC, with sufficient insurance in place.

“I strongly encourage an umbrella insurance policy. If a tenant gets hurt in your property and decides to sue, you will want to ensure you have the right structure and insurance in place,” says Clements.

To get a better sense of how much rent you might be able to collect, Anderson recommends reaching out to commercial real estate brokerages in the area and asking for historical rental rates for the last 10 years.

“That can give you a good snapshot on how market recessions or booms could impact your earnings or property value,” she says.

How to determine affordability

You don’t have to be a millionaire to invest in property or a second home. To determine whether you are ready to buy, Clements recommends asking yourself two questions.

“Are you cash-flow positive, and could you handle six months without receiving rent? If you can’t answer yes to both of those questions, now is probably not the right time to buy an investment property,” he says.

Shtainer says that buyers should be prudent, just as they would be with their primary residence. She advises that if you’re not buying the property in cash and will need financing, you should make sure you get pre-approved.

Pre-approval will tell you how much the lender is willing to give you for the purchase of your second home.

“Understanding your budget and sticking to it is very important, especially when making an investment,” says Shtainer.

She says that buyers should do their due diligence to ascertain what they can afford, and she suggests they partner with a broker in their market to make sure they are purchasing a property at a favorable market value.

By Ana Durrani | Mar 19, 2020

I read this article HERE 

Got Real Estate Questions?   The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.  How can The Caton Team help you?

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Call | Text | Sabrina 650.799.4333 | Susan 650.796.0654

Email |   Info@TheCatonTeam.com

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

The Caton Team Testimonials | The Caton Team Blog – The Real Estate Beat | TheCatonTeam.com | Facebook | Instagram | HomeSnap | Pintrest | LinkedIN Sabrina | LinkedIN Susan

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  Mobile Real Estate by The Caton Team

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.


 

Keep Calm and Carry On With Your Real Estate Needs… Only Later

 

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Some Highlights

  • The COVID-19 pandemic is causing an economic slowdown.
  • The good news is, home values actually increased in 3 of the last 5 U.S. recessions and decreased by less than 2% in the 4th.
  • All things considered, an economic slowdown does not equal a housing crisis, and this will not be a repeat of 2008.

Some Thoughts

  • Prepare for delays
  • Write in contingencies to protect yourself
  • Be Patient – all services are effected, title and escrow, lenders, appraisals, inspectors

This economic response is very different from our 2009 experience.  Our last economic melt down, there was a glutton of homes for sale and due to loan defaults, very strict lending that cut out many purchasers from moving forward.  It slowed down our recovery.

This time a round, we’ve been in a housing shortage and the big differences, this is plenty of affordable loan options available.

When we see a stock market crash, we often see a real estate boom or in this case – perhaps a real estate maintenance – as people divert money and investments from a risky stock market to an investment they can live in – Real Estate – historically real estate always appreciates and you’ll come out head in the long run.

Will there be a price impact – we’d be a fool to think it wouldn’t – but I think that is all relative.  Buyers have always set the price – so as they are cautious prices will reflect that – however we all need a place to live and I think we’ll see a lot of people – who have been waiting for an adjustment ready to take advantage of low rates and possibly slower demand.  I know Warren Buffet buys in a down market – and he knows a thing or two.

The bottom line – don’t freak out.  If you have your home and don’t need to move – don’t fret.  If you are selling or were thinking of selling, hold tight.  RIght now the market is affected by the shelter in place but we were expecting a great Spring Season and now Fall!

We are all in this together –

Let The Caton Team know how we can be of service.

 

I wrote this article and added info from here 

Got Real Estate Questions?   The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.  How can The Caton Team help you?

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Call | Text | Sabrina 650.799.4333 | Susan 650.796.0654

Email |   Info@TheCatonTeam.com

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

The Caton Team Testimonials | The Caton Team Blog – The Real Estate Beat | TheCatonTeam.com | Facebook | Instagram | HomeSnap | Pintrest | LinkedIN Sabrina | LinkedIN Susan

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  Mobile Real Estate by The Caton Team

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.


 

Opportunity is Knocking in San Carlos – Fixer Upper for Sale

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For Sale:  749 Orange Avenue, San Carlos Ca

Features 3 Bedrooms | 2.5 Baths | 1590 SF Home | 5967 SF Lot

The first time on the market since 1970 – this home needs a new family to love and care for it.  Located on the north end of Orange, a block from Cedar and Cherry – close to the San Carlos Library, San Carlos Schools and within walking distance to our wonderful downtown with 5 Star Dining and entertainment. 

Bring your vision and your contractor.  Home is built on a downward slope.  

Listed by Berkshire Hathaway HomeServices – Drysdale Properties Redwood City. 

MLS ML81772963

For more info and photos visit:  749 Orange Ave, San Carlos

For a private showing contact The Caton Team

Call | Text | Sabrina 650.799.4333 | Susan 650.796.0654

Email |   Info@TheCatonTeam.com

 

Got Real Estate Questions?   The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.  How can The Caton Team help you?

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Call | Text | Sabrina 650.799.4333 | Susan 650.796.0654

Email |   Info@TheCatonTeam.com

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

The Caton Team Testimonials | The Caton Team Blog – The Real Estate Beat | TheCatonTeam.com | Facebook | Instagram | HomeSnap | Pintrest | LinkedIN Sabrina | LinkedIN Susan

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  Mobile Real Estate by The Caton Team

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.


 

First-Time Home Buyer Workshop – Get to know the HEART – 5% Down Payment Loan Program for San Mateo County

* If you cannot attend the workshop, please do not hesitate to contact The Caton Team. We’d be more than happy to help you.*

Call | Text | Sabrina 650.799.4333 | Susan 650.796.0654

Email |   Info@TheCatonTeam.com

Are you a First-Time Home Buyer?  

Does saving 20% for the down-payment seem daunting?  

Does paying Private Mortgage Insurance (PMI) frost your cookies?  

Then you need to learn about the HEART LOAN of San Mateo County and this workshop is a must!

Get to know the HEART San Mateo County Loan Program – on Wednesday October 30, 2019 at the San Carlos library. 

If you’re buying your first home in this market, you know how painfully hard it is to save for the 20% down-payment.  Must banks require 20% and anything less requires expensive and pointless Private Mortgage Insurance (PMI).  Well the HEART loan – Housing Endowment and Regional Trust of San Mateo is here to help.  They are offering 5% down with NO PMI.  You carry a 30 year, 80% 1st mortgage and a 15 year ,15% 2nd mortgage.  This loan covers single family homes, condos and townhomes anywhere in San Mateo County for a vaule up to $908,156.

The Caton Team has helped several families get into their first home with the HEART program through Meriwest. 

For more information – HEART and Meriwest are hosting a FREE loan workshop at the San Carlos library at 6pm on Wednesday October 30th.  Register Here

Buying and Selling Real Estate doesn’t have to be scary – contact The Caton Team at any time for more information.  We love what we do and would love to help you!

Call | Text | Sabrina 650.799.4333 | Susan 650.796.0654

Email |   Info@TheCatonTeam.com

For more information or to Register – click here. 

 

 

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Got Real Estate Questions?   The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.  How can The Caton Team help you?

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Call | Text | Sabrina 650.799.4333 | Susan 650.796.0654

Email |   Info@TheCatonTeam.com

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

The Caton Team Testimonials | The Caton Team Blog – The Real Estate Beat | TheCatonTeam.com | Facebook | Instagram | HomeSnap | Pintrest | LinkedIN Sabrina | LinkedIN Susan

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  Mobile Real Estate by The Caton Team

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.


 

Historically Low Interest Rates

I feel like I’ve said this a few times — but history is always in the making.  Right now I’m seeing historically low interest rates!  As low as 3% — 4% — that is some affordable money!

What does this mean?  If interest rates are low — the cost of borrowing money is low — meaning you can borrow more money – IE a larger loan — for the same monthly rate that you did before with a higher rate and a smaller loan.  So your purchase power goes UP because the cost of borrowing went down.  But don’t wait too long.  Interest rates adjust daily and until you’re in contract and have locked your rate — they might as well be birds on a wire.

The market cools each Fall and if the Feds maintain this low interest rate — we’re looking at some great buying opportunities.  Right now the San Francisco Peninsula has excess inventory, homes that didn’t sell in the first two weeks are getting lost in the shuffle and as a result — dropping their price to get new eyes in the door.

Don’t wait for a price reduction to get the home you want — just contact The Caton Team and let us work our magic. 

Oh – and if you already own a home — it’s time to take a look at your loan and see how much you can save with a refi.

If you need a great lender to chat with — contact The Caton Team and we’ll put you in touch with our amazing team of lenders! 

 

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Got Real Estate Questions?   The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.  How can The Caton Team help you?

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Call | Text | Sabrina 650.799.4333 | Susan 650.796.0654

Email |   Info@TheCatonTeam.com

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

The Caton Team Testimonials | The Caton Team Blog – The Real Estate Beat | TheCatonTeam.com | Facebook | Instagram | HomeSnap | Pintrest | LinkedIN Sabrina | LinkedIN Susan

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  Mobile Real Estate by The Caton Team

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.


 

Where is this Real Estate Market Headed?

Where is this Real Estate Market Headed?  That is the hottest topic in Real Estate today!  

I just found a great article keepingcurrentmatters.com – that took several surveys to give us something to chew on.  The below image takes those surveys and shows us some different values. 

It is interesting to see the forecast for each model.  Just know Real Estate goes up and down, we’ve reached our 10 years mark since the crash – we’ve seen massive market healing but now – are we at the top?

Real Estate has and always will be a long term investment.  It goes up and down over the years.  Yes, in hot markets it feels like you can buy and flip in two weeks but that market is in the past now.  For most of 2019 and staring in Fall of 2018 – The Caton Team saw a change in the market.  Here on the San Francisco Peninsula – we are in a Buyers Market!  Now – let’s be real – well priced homes, in good areas are going to warranty more actively.  I hosted a well priced duplex this weekend and they have an offer date set after four days on the market.  It’s the first offer date I’ve seen in a while.  But that price and location – makes it a hot market.

However, as hot as new listings are – don’t forget to look at older inventory.  If a home is on the market over the Fall and Holidays it is because it has to sell – giving buyers a great opportunity. 

So where is the market going?  How about we ask you a different question? Where are you going?  Do you want to make Silicon Valley your home?  Do you work here, love what you do and want to earn some equity instead of wasting money on rent?  Do you think prices are so high – you can’t buy – have you considered house hacks or co-investing.  If you see the vaule if Real Estate no matter where we are in the Real Estate High Low cycle – then you know – now is a great time to buy.

With so much conflicting information out there, making the right decision can be daunting.  If you have some questions or just want to bounce around idea – give The Caton Team a call.  We’re not here to sell you a house – but we are here to help you invest in your future. 

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I read this article at: keepingcurrentmatters.com

Got Real Estate Questions?   The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.  How can The Caton Team help you?

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Call | Text | Sabrina 650.799.4333 | Susan 650.796.0654

Email |   Info@TheCatonTeam.com

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

The Caton Team Testimonials | The Caton Team Blog – The Real Estate Beat | TheCatonTeam.com | Facebook | Instagram | HomeSnap | Pintrest | LinkedIN Sabrina | LinkedIN Susan

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  Mobile Real Estate by The Caton Team

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.


 

 

Testimonial of the Day – From Jenny

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To The Future Clients of The Caton Team

Buying a house can be a very scary experience especially in the San Francisco Bay Area where very high stakes are involved.  I have purchased home in other states and nothing was quite like it is here.

The Caton Team helped smooth and ease the way whenever there was a ‘pothole-in-the-road’ on the way to owning my home.  It is nice having a “team approach” because I felt like I would receive two opinions that gave me different perspectives to look at.  I was then able to see through their eyes the ‘diamond in the rough’ and, what I could do with it.

I found them to be kind, caring, understanding and sensitive to my needs, informative, diligent and sympathetic to my situation.  Their follow-through was great!  They didn’t leaving me hanging with “I’ll get back to you.”  They found the answers to all my questions and in a timely manner.

I felt they went above and beyond when I asked them to video tape an entire house, including a fuze box and “sniff” the craw space for me.  I happened to be in another state at the time and needed them to act quickly because the property I was looking at was very active.  This really helped because it made up my mind that I was gong to bid on it.

I liked the fact that, if I couldn’t reach Sabrina I could talk to Susan and, the messages got communicated between them. We were all on the same page!

I am so grateful that they were able to move quickly through the process so I could be in the game of the ‘biding war”.

And, as it turned out, with either advice I got the home I was bidding on and wanted!

Thank you Caton Team!

– Jenny B.

Contact us for a consultation if you’re considering buying or selling real estate.

Know of anyone who needs a hard-working, full-time, dedicated Realtor – let us know! We’d be happy to take great care of them!

To read all our testimonials visit The Caton Team Testimonials and Yelp!

 

Got Real Estate Questions?   The Caton Team is here to help.

 

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Call | Text | Sabrina 650.799.4333 | Susan 650.796.0654

Email |   Info@TheCatonTeam.com

 

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

The Caton Team Testimonials | The Caton Team Blog – The Real Estate Beat | TheCatonTeam.com | Facebook | Instagram | HomeSnap | Pintrest | LinkedIN Sabrina | LinkedIN Susan

 

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  Mobile Real Estate by The Caton Team

 

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.

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