Why 2016 Is The Year To Buy Investment Property

If you’ve been on the fence about investing in real estate, it looks like 2016 is shaping up to be a great year for you to close the deal on some property. There have been a number of recent changes in the economy and housing market, many of which look to be quite favorable for investors. Here are just a few reasons why 2016 is the year to land some investment property.

Home Prices Will Level Off

Home values have been on the rise in recent years, which can be both a good and bad thing for investors. For people looking to sell their property, these higher prices can mean very profitable sales. But for folks looking to buy? Well, sky high real estate costs can be a dealbreaker. Investors interested in buying new property may be singing a different tune in 2016, as prices are expected to level off and stay that way. Zillow’s chief economist says that home prices are expected to rise 3.5% next year, which will likely result in a wave of new buyers snagging up property.

Inventory Will Expand

Steadying home prices will also result in increased listings. Homeowners who have seen their homes grow in value over the last few years may be ready to cash in on some of that appreciation, leading to an influx of new properties being sold in 2016. Another area that’s expected to see some growth next year is in newly built homes. The lure of the McMansion has officially worn off, and builders are turning more and more to constructing starter and middle-range homes, which appeal to a larger segment of buyers – including investors.

Mortgage Rates may be on the Rise

The days of the dirt-cheap mortgage may be coming to an end soon. While mortgage rates are expected to remain low, last week’s short-term loan rate increase by the Feds may be a sign of the times. The economy is stable and growing, so it wouldn’t be too off base to think such a thing might also happen with interest rates for mortgages in the coming years. Locking in at the low rates we have now, and will likely have at least through the first half of 2016, isn’t such a bad idea.

Rents are High and Climbing

Right now, rents in Kansas City and other major housing markets are high, and they’re still climbing. Landing an investment property (or two or three) in 2016 will get you in on the action, ensuring that you have a steady flow of income from rental property that will likely continue to increase over time. For investors, being able to command a higher rental rate usually equates to greater cash flow and increased financial security, now and in the future.