Investment Property, First Purchase?

Real Estate

Why an Investment Property Should Be Your First Real Estate Purchase

Take advantage of the current market conditions and purchase an investment property. Put your money in an appreciating asset. Here's five reasons why. 

1. Rates are low

 Lower rates mean more affordable lending, or more for your money if you choose to reach higher.

2. It will appreciate

According to CoreLogic, "The overall home price index (HPI) has increased on a year-over-year basis every month for seven years." The long-term price appreciation of real estate can provide one of the safest investments out there.

3. Passive income is possible and beneficial

Yes, it's nice to know there will likely be appreciation over time, but the real key to success with investment properties is passive income. "The best part about rental properties is that they provide a stable income," said Mashvisor. "What would be better than having a check sent to you every month? In order to have positive cash flow, you have to make sure you invest in a profitable rental property."

4. Convert to short-term rental

The short-term rental market has opened up a new world of opportunity for investors. By buying in the right location—by the beach, near a ski resort, or in close proximity to a popular annual event like Coachella, you have the potential of making a significant return in a short period of time. Just be sure to check the local laws, as lots of cities have been cracking down on Airbnb and other services.

5. It can help you buy the home of your dreams

"Buying an investment property before your first home does not imply that you won't have the funds to purchase your actual home at some point," said Mashvisor. "In fact, investment properties that have been purchased wisely and have grown in value can offer you a sizeable amount of wealth and equity."