Even non-real estate folks these days know we are in a housing market bust. Foreclosures are on the rise, sales are down, unemployment is up, fuel and cost-of-living expenses are skyrocketing; all of these issues are a big concern for all investors, well, for all people, regardless of whether they are investors or not, actually. And all of these economic factors are affecting investment property mortgages.
Just a few years back, it was not uncommon for banks to be tripping all over themselves to get the real estate investor to use their services. One-hundred percent investment property mortgages were not uncommon. In fact, they were readily available everywhere.
Now, however, it can be trickier to secure the investment property mortgages you would like. Banks and other lenders are tightening up on the restrictions, and it is nearly impossible to get a 100% loan anymore. One-hundred percent loans are those most likely to end in foreclosure, after all.
The banking industry's caution, however, is not necessarily a bad thing for the real estate investor. In fact, it can be beneficial. The best thing you can probably do for yourself if you are going to continue investing in real estate is to be conservative enough in your practices to be successful even in a tough economy.
When deciding on your investment property mortgages, the best thing you can probably do is help ensure that your goals are going to be met when you actually make the purchase, rather than when you sell the property. What do I mean?
When you purchase with the intent to sell at a profit, you should not count on a huge asking price to make you the return you want. Instead, you should focus on what you pay for the property and the terms of your investment property mortgages. Look for built-in equity in your properties. If your property is purchased low, with equity already a part of the deal, your chances of success are better, and your ability to get a favorable investment property mortgage is better, too.
One of the basic principles of any investment is "buy low, sell high," right? Well, we are definitely not in a seller's market right now, which is the perfect time to buy low. So, if you are deeply troubled over your decision to become a real estate investor, fear not. With the right strategies, due caution, and the right investment property mortgages, you can make it through this tight market and achieve your investment goals in the future.
It is interesting to note that in Nigeria today, many landed properties are up for sale, due to various reasons. For instance, a building may be in the possession of a beneficiary by virtue of an inheritance and the new owner wants to sell it and use the funds as capital for his new start-up business. With the prices of cement and other building materials going up, many Nigerians now prefer to sell their uncompleted buildings either to raise money for a start-up or to invest in different types of investment, as discussed in previous posts. A significant number of Nigerians however sell the above-mentioned properties, add some extra cash and then go out to purchase new residential or commercial housing units which are springing up all over the place as housing estates. These estates are solely owned by private organizations but sometimes in partnership with some State Governments and the Federal Government. The government housing units are supposed to be fairly cheap... but are they? They appear to be only patronized by middle to upper-class Nigerians due to their apparently exhorbitant prices.