Should you invest in real estate right now? My advice is YES!
Approximately a year ago my opinion was the opposite. I would have told you to stay out of this crazy market as prices are way too high, but my mindset has shifted. Our economy is rapidly changing. This is why you should invest in real estate right now as a nurse practitioner:
- There has been over $8 trillion dollars injected into our economy over the last 2 years. What does this do? It causes INFLATION. Everyone is seeing the prices of everything go up around us. This is because the US dollar is losing its value, therefore the price of everything from gas to homes is going up. Inflation doesn’t magically disappear. Once the prices go up, they typically stay up and slightly increase year by year.
- The housing supply is LOW and the demand is HIGH. What does this do? It increases the cost of homes. The 2008 housing crisis is not going to happen again. Back then, the supply was high and the demand was not keeping pace with the supply. The market right now is the total opposite. There are not enough homes for people, therefore the value of the limited supply of homes is increasing.
- Interest rates are at historic lows. I literally just closed on a short term rental and my interest rate is 3%… An interest rate that low for an investment property is unheard of. Interest rates for primary residences are hovering around 2-2.5%. Essentially, the price for debt has never been lower and this is fueling the demand for real estate.
- COVID changed the workplace. More and more people are working from home. What is this doing? It is making people realize just how important their home is, thus they want to live in a nice one. This further increases the demand.
- Rent prices for long term rentals and nightly fees for short term rentals have increased over the past year. In addition, the demand for high quality short term rentals has never been greater as people are wanting to vacation again. I believe the rental game is a solid bet all around.
Because of these 5 predominant reasons, I do not see the prices of homes going down anytime soon, if ever to be quite frank. I am not alone in this line of thinking either. Most real estate investors are seeing the writing on the wall: current home prices are here to stay. So, if you are thinking about buying a home or investment property, I say go for it. Low interest rates will offset the increased cost as long as you purchase solid properties.