Comments on: Make the move ….

By: Chino Hills Homes

Chino Hills Homes — Sat, 14 Nov 2009 16:26:21 +0000

I agree that now is the time to invest if you are in a position to buy into this market that has been over sold, and yes interest rates will eventually go up. I don’t think rates will start to increase until the economy is rebounding. I don’t believe that will be happening until late 2010. That being said if you can get creative in a market like this do so.

By: Luis

Luis — Wed, 21 Oct 2009 23:20:23 +0000

And may I add the CRE is hitting the wall. Retail and commercial RE is highly leveraged and will be affected by this economy. Wall street may be riding high but main street is still in the basement and until jobs return more NOD’s and REO will hit the market of all sizes.

my motto “You dream about owning an ant hill you get an ant hill. You dream of owning an empire – you get an empire”

If you have a stable job and you got some hard cash. You should be able to take advantage of this market rather nicely.

By: Luis

Luis — Wed, 21 Oct 2009 22:39:53 +0000

I agree with wj. The government is running out of gimmicks. I would say get your cash house in order and wait because this recovery is long from over. Here in California the u-6 unemployment (unemployed + under employed + those who have given up) rate is above 20%.

The blood bath is coming, get your cash house in order now.

By: Adrian

Adrian — Wed, 21 Oct 2009 20:59:53 +0000

@ Trainnee – 30 yr Fixed interest rates are a ‘peculiar’ US quirk that every investor should be trying to take advantage of.

Investing ‘hands off’ shouldn’t be a deterrent for anybody: I saw one quadraplex for the first time in 5 yrs yesterday, and it was renovated entirely while I was in another country!

@ WJ – Within a range: if interest rates pop above , say, 8% to 10%, property prices can become ‘deflated’ … under that, they are not as sensitive to interest rate adjustments as one might think.

By: wj

wj — Wed, 21 Oct 2009 11:47:34 +0000

Wouldn’t the increase in interest rate bring about a decrease in home prices?

If home X is priced at $1mil now, it is because after factoring a 1% loan and a 3% rental yield, you get positive cashflow.

However, if interest rate rise to 3% or even more, it might result in a neutral or negative cashflow.

Like yourself, you always do your calculation to have a positive cashflow. 2 years out, when you are considering Home X and it is selling at $1 mil still while the loan rate is 3% and rental yield is 3%, you as the buyer will want to have home X pried at around probably $900k so that rental yield will increase to cover the loan rate and offer positive cashflow.

By: traineeinvestor

traineeinvestor — Wed, 21 Oct 2009 09:23:49 +0000

I would love to be able to lock in 30 year financing at current interest rates – but that is not possible in Hong Kong. (I’m currently paying a floating rate of about 1% so I can’t complain too much.)

I’d also love to be able to buy bombed out real estate in the US with such financing (but probably only in states that are in reasonable financial condition (less vulnerable to potential increases in property taxes) and which have favourable demographics. That said, I would be very reluctant to invest in real estate in a place where I do not live and which I do not visit at least annually.