This blog was published Sep. 16th 2024. If you are reading this blog after September 2024, some suggestions and advice may not apply.
I’m often asked, or I’ll often offer to fellow investors, my biggest regret in my real estate investing.
It’s always the same:
That we didn’t buy more rental homes between 2000 – when we bought our first home – and 2015, when we effectively stopped buying investment properties.
I was at an investor meet-up recently where a couple of investors expressed regret for not buying more rental homes at different times in their careers… 2014 in one case, 2017 in another.
And I’m certain that 10 years from now, investors today will lament that they didn’t buy more homes in 2024.
Yes, even during a year when interest rates are high, inventory is low, and cash flow is nearly impossible.
Just in case I’m not clearly making my point: right now is a great time to buy rental real estate.
I’ll make my case in 10 easy-to-follow (I hope) points:
Reasons to Buy Explained in 10 Steps...
1. Interest rates have chilled the real estate market. Days on the market are higher, and transactions are way down. I won’t bore you with specific statistics but ask any Realtor, and they’ll tell you… it’s chilly out there.
2. That means there is less competition. There’s still competition, for sure, but less today than we’ve seen in the last several years
3. Positive cash flow, as noted above, is nearly impossible outside a few select areas. But who cares?
4. OK, you’ll care if your investment goals include replacing your W2. However, the vast majority of investors work regular jobs and invest on the side. Many look at real estate as a wealth builder, not an income supplement.
5. So, if you are in that camp, get busy buying, because… and this is maybe the most important point…
6. Interest rates are coming down. How much? Probably not much, but later this week, the Fed is going to reduce interest rates. And my guess is it’s the first of a few drops.
7. What does this mean? It means that more buyers will enter the market. It means competition will work even harder against you. It means prices will continue to go up… likely faster than we’ve seen so far in 2024.
8. The stuff you buy today will increase in value, I think, pretty quickly. That means you’re wealth will increase which, as we’ve discussed many times, should be the key objective in residential investment.
9. And I truly think you’ll be able to refinance your property in a year or two at a nice discount, and voila… you’ll have some cash flow.
