What an opportunistic market! If you have ever thought about investing in real estate, particularly in condos or townhomes this is the market for you! I have spoken with many owners of condos and townhomes in the Bellevue, Kirkland, and Redmond areas who have decided to capitalize on the downturn in our market by renting out their current home, using that rental income to leverage purchasing another condo or townhome as their primary residence at a significantly discounted price. These savvy owners know they will DOUBLE their money in the next 5-7 years on both properties. How do you know if this strategy is right for you? Would your current home, if rented, cash flow or be negative a small amount that you could afford to float for several years? Do you need or would you like additional tax write offs for the coming year? Have you had a fairly stable income over the past 3 years, and do you have a good idea of your income potential in the future? Do you have some cash to put down (At least 3%) on a new property to secure the lowest interest rate possible? If you can answer yes to the majority of these questions, WHAT ARE YOU WAITING FOR?
Look at the numbers: If you were to purchase a condo or townhome in Bellevue now at the 2008 median sold price you would pay around $323,000. If you put 10% down obtaining a mortgage at $313,000 you would be able to write off approximately $17,110 in interest for the first year alone, plus whatever interest you are paying on your former primary residence as well. So not only are you reducing your taxable income significantly, but you are utilizing an investment that has made more self made millionaires than any other single investment at the most opportunistic time in the past several decades. The consistent strategy for self made millionaires through real estate has always been: buy and HOLD!
Maybe your nest egg like everyone else’s took a hit this past year. Have you considered moving some of your retirement into a self directed IRA and purchase properties? Did you know many boomers have begun to do this in order to double their nest egg in the next 10 years using a self directed IRA as cash to purchase properties at these low, low prices? Think about it, will the stock and bond markets not only recover but double your money in the next 10 years while paying you a monthly dividend or residual? NO! But buying investment properties and getting quality renters in them would! Truth is, property managers are very reasonable for removing the headache of dealing with renters. Meaning, you don’t have to worry about a thing with your new investment, except checking the numbers every year to watch what you gain.
Bellevue market facts (based on NWMLS): median sold price for townhomes and condos in Bellevue:
2006- $329,000
2007- $326,000
2008- $323,000
Prices have only come down about 2% from 2006. Will they go down more? Who knows, but regardless real estate has typically doubled in value in almost every market area every 7-10 years. Bellevue condos and townhomes tend to double every 5-7 years because of our strong and growing local economy. While most properties have dropped 15-20% around the nation, condos and townhomes in Bellevue have only dropped 2% in the past two years! These numbers show us they will be quick to recover as well! Put your investment where you know it is going to bear fruit in the near future, truth is, most people can’t afford to take any more losses.
If you would like to discuss potential investment opportunities in condos and townhomes in the Bellevue, WA area please feel free to contact me through my website:
www.TheTownhomeAgent.com.
Thank you for your time, and I wish you much success,
-Michael Dzurenko III
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