Now is a great time to invest in a rental: Low home prices and low interest rates make this a great time to become an investor.

Now is a great time to invest in a rental: Low home prices and low interest rates make this a great time to become an investor.

If you're thinking about investing in a rental property, experts say low home prices combined with low interest rates make this the best time in years to become a real-estate investor.

"We haven't seen home prices this low in so many years, coupled with the rates being so low," says Steve Albin, an agent with Realty Investors LLC / Justlistedknoxville.com in Knoxville. Tennessee. "When the money is cheap to borrow and the houses are cheap to buy, it's absolutely the best time to invest."

Partner with experience. First-time investors should find a real-estate agent experienced in investment property deals who can help you locate promising properties. "Look for relational brokers who expect to do business with you again and therefore are going to be much more careful with what they recommend," Tina Mounger says an agent with Realty Investors LLC / Justlistedknoxville.com.

Whatever you do, understand that buying investment property is an entirely different experience than buying your primary residence. "When you go to buy your own home, you usually have emotions in it," Tina Mounger says. "When you go to buy an investment property, you need to put all that aside and ask, 'What makes sense?'"

Steve ALBIN 865-235-1520 Tina Mounger 865-748-6216 OUR clients know us by our name, and our reputation and our cell phone number The CRS Designation, awarded by the Council of Residential Specialists, is the highest professional designation awarded to Realtors® in the residential sales field. Fewer than 4 percent of all Realtors® nation wide hold the Certified Residential Specialist (CRS) "Only a buyer's agent is obligated to provide complete confidentiality of the buyers personal motives or financial intentions. " Your JustListedKnoxville.com real estate agent is: Technologically literate, A local market expert, Your guide, Your advocate, A lifesaver, Your resource with Turnkey Service and Privacy. We offer you seasoned, professional "Buyer's Brokers".

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You have an important decision to make.

You have an important decision to make. Are you going to be one sellers in your area who will place their property SOLD this month or will you still be for sale next month? JustSOLDKnoxville.com

Real Estate Today RADIO covers the benefits and challenges of homeownership, from expert advice on buying and selling, to remodeling and landscaping,

Real Estate Today RADIO covers the benefits and challenges of homeownership, from expert advice on buying and selling, to remodeling and landscaping, to the state of the current market and home financing issues. The show's interactive experience offers listeners an opportunity to exchange information and learn from some of the nation’s most recognized experts on a variety of real estate related topics such as buying and selling homes, obtaining mortgages, seasonal markets, home improvements and more. Guests often include key lawmakers, NAR leadership, staging and remodeling experts, and respected members of the national media.

Cost of Waiting for Prices to Fall

Many purchasers have been sitting on the sidelines waiting for home prices to hit bottom. They want to guarantee that they are purchasing at the best possible price. Like them, we also believe that prices still have some room to fall in most markets. However, we disagree that waiting is a good financial decision. The buyer should not be concerned about housing prices. They should be concerned about cost.

The cost of a house is made up of the price AND THE INTEREST RATE they will be paying. Two different pieces of news released yesterday highlight this point.

PRICES

The National Association of Realtors (NAR) released their 4th quarter housing research report. In the release, they reported that home sales rose 15.4% in the 4th quarter over the 3rd quarter. They also showed that prices remained stable during the year: The national median existing single-family price was $170,600 in the fourth quarter, up 0.2 percent from $170,300 in the fourth quarter of 2009.

A buyer who delayed a purchase might find solace in the fact that prices have not increased. However, the other news released yesterday paints a different picture.

INTEREST RATES

The Primary Mortgage Market Survey was released by Freddie Mac which showed that the 30 year fixed rate mortgage was at 5.05%. Frank Nothaft, vice president and chief economist of Freddie Mac said: “Long-term bond yields jumped on positive economic data reports, which placed upward pressure on mortgage rates this week…As a result, interest rates on a 30-year fixed-rate mortgage rose to the highest level since the last week in April 2010.”

So prices have remained stable but interest rates have risen dramatically in the last 90 days. What does that mean to a buyer looking to purchase a home this year? The price is the same. It just costs more. Let’s show you what the news means:

By sitting on the sidelines for the last 90 days a purchaser lost:

$89.44 a month

$1,073.28 a year

$32,198.40 over the thirty year life of the mortgage

If you buy a $340,000 home, double all these numbers.

Bottom Line Even if prices fall another 10% this year, the cost of a home will increase if interest rates go up more than 1%. Buyers should not worry where prices are going. They should be concerned where costs will be later in the year. The Cost of Waiting for Prices to Fall by THE KCM CREW on FEBRUARY 11, 2011