When Is the Best Time to Own a Real Estate Asset?August 16, 2021
How to tell when is the best time to own a real estate asset:
- Think about why you are buying real estate
- Consider the current mortgage rates and interest rates
- Be aware of long-term market trends
- Check your financial capability
Real estate assets are highly attractive for investors due to their potential for high-value appreciation and passive income. You can even use it to build wealth in the long run. However, the real estate market is also continuously changing because numerous factors affect it. Some of the major driving factors range from economic indicators, consumer demand, government policies to supply levels. This being said, it can be challenging for a new investor to know when is the best time to own a real estate asset.
Undoubtedly, the age-old question of “When is the best time to own a real estate asset?” is asked more frequently nowadays due to the COVID-19 pandemic. Despite worldwide economies facing uncertainty, investment in real estate assets are still on the rise. So, when is the best time to invest in real estate? Continue reading on to learn more about this and what are the factors up for consideration.
Think About Why You Are Buying Real Estate
Owning a real estate asset could mean you will occupy the property or you will use it as an investment.
If you are planning to own real estate because you will live there, consider whether it would be better to buy or rent. You should think about whether you will be living in the property for the long term or just because you are working temporarily. It may be ideal to own a real estate asset when you need a house and need to secure a low mortgage for the following years.
If you want to own a real estate asset as an investment, the considerations will also differ. Let’s say you want to rent out your property for passive income opportunities. The consideration will involve how much money the asset can actually generate. For this, you will need to research the current rental market and what are the different expenses you will incur when renting out the property.
Consider The Mortgage Rates and Interest Rates
Given the current pandemic, mortgage rates are at historic lows with lending companies offering long-term mortgages below 3%. Markets are shifting and central banks are also reducing interest rates. Keep in mind that high interest rates increase the cost of borrowing money. As a consequence, borrowers will have to pay a higher monthly mortgage.
Nowadays, low mortgage rates and interest rates have boosted real estate asset demand. It makes sense for homebuyers and investors to push their real estate asset plans during periods like these because of the affordable properties. You can take out a real estate loan and own that property you’ve always dreamed of. Just make sure you choose a property with a potential high appreciation value in the future to maximize your investment. Some of the factors that increase a property’s value are location, bigger size, good home conditions (e.g., no repairs needed), and home upgrades.
Be Aware of Long-Term Market Trends
There is no “best time” to own a real estate asset because there are different factors at play. Instead, investors need to be aware of long-term market trends.
Whether you want to own land, a condominium, or a single-family home, one thing remains true: real estate assets are recognized as one of the smartest and safest investments because they are tangible and have increasing values particularly when compared to other investments (e.g., stocks that suffer from market fluctuations, cars that depreciate immediately after purchase) that are prone to volatile market trends.
Despite the current economic uncertainties, the real estate market remains robust. Therefore, it is an opportune time to invest in real estate assets.
Check Your Financial Capability
Just like any investment, real estate assets can cost a huge chunk of money. If you are planning to own a property to occupy it, you will need to make sure you are capable of paying the monthly mortgage. In the same way, if you are planning to own real estate as an investment, you need to be properly funded as well.
Know the average real estate asset price in your target market and the financing options available to you. If you don’t have much saved, focus on owning properties with flexible payment schemes. Condominiums typically offer flexible payment terms for interested investors and homebuyers alike. Take the Kingsquare Residential Suites by Megaworld Manila as an example. It is being offered with no down payment scheme, 40% payable in 60 months with no interest, and 60% balance upon turnover.
If you have the means to afford the real estate asset, then it is the best time to own it.
There are several clear advantages to owning real estate assets, such as increasing investment values and the potential for garnering passive income. Nonetheless, it is understandable to wonder when is the best time to own a real estate asset. This fact is even more valid given the uncertainties brought by the pandemic. Just remember that due diligence is key.
Looking for a real estate asset that is designed for long-term investment success? Megaworld Manila projects are the top choice. Click here to get in touch with our customer service team today.