So great time for sellers to sell if they have that intention to sell that property.
Is it a good time to buy? Strangely, it could be the same answer, yes. I know people hate when we talk out of both sides of our mouth, yes and yes how can that be?
The fact is, interest rates are at record lows so you can buy a property now, and I’m talking about investment properties, you can buy now with a lower interest rate which means your cost of debt is going to be lower, and the other thing is that we have a trend here in California because of the lack of construction, lack of building for so many reasons, cost of materials, and one thing that’s not often talked about, municipalities are charging builders a fortune in permit fees. Before you even stick a shovel in the ground you might have forty to seventy thousand dollars in fees, and that’s not going to change for a while.
Pressure on housing is going to keep increasing, so buying now, at a low interest rate will lock you in at a low rate. If we have inflation, if we have spiraling real estate prices, guess what? Your costs aren’t going up for debt expense, but the value of your property is going up. Every year you’ve got appreciation.
Rents are strong. We have 1% vacancy rate factor right now, and guess what? That’s going to cause pressure on rents for the next 1, 2, 3 years, until things settle down. So what does that mean? Well, you can look at rent increases for sure for the next 1 or 2 years.
All these factors help make it a good time, it’s not like a bad time. One thing you have to worry about is, there is a lot of competition for properties, so trying to buy a duplex or fourplex can mean competing with five to ten other buyers. Work with a good strong professional to help negotiate on your behalf the best you can. Keep your emotions out of it and try to look at the numbers and the future potential.
