Buying a home is a smart investment now. Real estate mortgages are low hovering around 3.27% ranges while rent costs continue to rise. For example, over the last six months Nashville Tennessee one bedroom rental apartments increased by $65.5 to $832 per month (8% increase) and two bedroom apartments have increased by $79 to $978 per month (8% increase). Buying property to gain a steady rental income from renters is a sound investment if you are retired and have the time maintain the units. A frequent trend I’m seeing is aging baby boomers looking to downsize. This is causing home sales to rise dramatically in many communities like Ridgetop Tennessee (see charts & analysis below), where the economy is very strong and you can pick-up a nice 3 bedroom home on one acre for below $169,000 comments, James Rickman, CEO of Tennessee Estate Sales & Business Liquidation. As the country struggles with greater debt, higher taxes and reduced rent tax deductions, its more attractive to buy a home.
For the next five years, I recommend smart investors dedicate a healthy portion of their investment portfolio to buying real estate whether its your first home or a rental income property the return on investment is great. In November, existing home sales rose 5.9% to an annualized rate of 5 million, beating Wall Street expectations. Last month was the 17th consecutive month of growth in the housing market and the highest level of sales since November 2009. The national price for an existing home rose 10.1% to $180,600 in November 2012.
Despite three million homes in foreclosure in the U.S., a steady trend is growing among retiring baby boomers that are downsizing and locating closer to urban areas that are accessible to public transportation.
By 2016, over 72 million baby boomers will have retired many requiring medical care for diabetes, cancer treatment and dementia. I’ve seen a lot of homes “for sale by owner” that can be a great way to save as few thousand dollars on closing costs if you find the right opportunity. Need estate moving sales fill out form below.
Real estate housing outlook for 2013 and beyond: