Since the housing bubble burst a few years back, new construction has slowed significantly. While this does not bode particularly well for construction companies, it actually has provided the opportunity for consumers to benefit from some excellent bargains. Using the down market to your advantage as a real estate investor or homebuyer is easier than it may seem. By keeping your eyes out for deals and knowing quality when you see it, you could actually make very smart investments in the under-valued market.
In order to stimulate the economy, the Federal Reserve has placed interest rates at record low levels. This means that it is possible to secure record-breakingly low priced loans for a variety of consumer goods, including new construction loans. To build a new home, you do not purchase a traditional mortgage. First, you receive a construction loan. These loans are traditionally doled out in sections that correspond directly to the progress of your build. That way, if something goes awry during the building process, you won’t be stuck with thousands of dollars that you cannot yet afford to spend. Once the construction has been completed, then the bank uses a mortgage to pay back the construction loan.
Saving money on interest rates will make both the construction loan and the mortgage you purchase to pay back that loan less expensive. Because the housing market is in a downswing, there are real opportunities to capitalize. In order to make a smart investment, though, you need to do your market research. As you have probably heard by now, when it comes to real estate, the three most important things to consider are location, location, and location. There is no magic formula that can guarantee that you will make money on a particular investment, but there are certain clues that you can rely on to help you gauge a certain area.
Take a close look at transportation options in the location you are looking for, and find out if the city or state you live in has any future transportation plans for that location. Look at past real estate transactions near the spot you’re considering to get a sense of the market over the past 5 years. Talk to neighbors or local business owners if you’re brand new to the area to get a sense of how a particular location has changed over the years. By taking these steps, you can get a sense of any changes to the neighborhood or county and make a smart investment decision for you and your family.
By selecting a lower priced area that seems to be developing and taking advantage of the super low interest rates that are currently available to the public, you could make a very smart real estate decision. Of course, there are always risks involved with new construction and it is vital that you’re prepared for this so that you don’t end up in a difficult financial situation. Check out new construction options in your area today!