Buy an Investment Property

Why You Need to Purchase Rental Properties in Northern Virginia Right Now!

1. Investing in real estate solely for appreciation is the wrong strategy.
As the past five years have demonstrated, buying properties while losing money or breaking even hoping for price appreciation can lead to financial loss. No one can predict with absolute certainty the direction that prices will take from year to year. The length of time until we return to a “Normal” market is equally unpredictable. The most important thing in real estate investing is current cash flow. Any future appreciation will be a welcome surprise, which leads directly to reason number two.

2. Currently there are properties in Northern Virginia that are yielding strong, positive cash flows.
Massive drops in home values during the recession combined with large numbers of former homeowners who are now renters have created a landlord’s market in pockets of Northern Virginia, particularly some areas in Prince William County. We are finding properties for investors that yield cash-on-cash returns of at least 3%. However, getting such returns is highly dependant on interest rates, which leads us to reason number three.

3. Interests rates are at historic and unsustainable lows.
At the 4% to 5%, interest rates that most investors can qualify for (interest rates on investment properties run slightly higher than on owner-occupied housing) rates are at historically low levels that cannot last once the economy starts to improve. Why does this matter for real estate investing? Just a 1% increase in rates will decrease your cash-on-cash return by 3% and a 2% increase in rates will decrease returns by 6%.

If you are interested in purchasing investment property in Prince William County, call us at 703-298-8421 or drop us an email at Dwight@TheMorrisRealtyTeam.com. You can also fill out the form below and we will contact you about your investment profile. We are here to help you find your next investment property!

 

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