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The New Face Of Real Estate Investors


June 11, 2013
(NAPS)—It may seem surprising to some, but real estate investors can not only do well for themselves, they can do good for the community, too.

Here's How

Back when the housing market went bad, investors got a lot of the blame. They were accused of taking on more properties than they could afford, which resulted in increased foreclosures. Now, however, investors are finding valuable opportunities and earning a more respectable reputation.

In several areas that were hit hard by the housing and economic recessions, investors are playing a key role in the turnaround. Many of today's investors are ordinary people, simply buying a second home in their own neighborhood and turning it into a rental property.

So why the surge in real estate investment? These investors see the "perfect storm" of opportunity: historically low interest rates, attractive home prices and a great selection. The new breed of investor also removes many damaged and vacant properties off the market and makes much-needed repairs to improve the value of their investment and the neighborhood.

Because rental demand is strong, today's investor can realize a positive cash flow and hold the property for appreciation over the long term. Also, Fannie Mae now allows financing for up to 20 properties for individual investors, in addition to financing that will cover both the property purchase and remodeling costs.

During any real estate downturn, all eyes fall on real estate investors. Their activity level often indicates how stable real estate markets are and signals other buyers when it's a good time to make a move—typically when investors sense prices have stopped declining.

Investors are sending a strong message about their confidence in the current market by making up over 20 percent of all residential real estate buyers.

Expert's Opinion

"Real estate is and has always been a sound long-term investment," said Margaret Kelly, CEO of the real estate franchise company RE/MAX, LLC. "More and more of the folks next door are taking steps to secure one or two rental properties or a vacation home in their favorite locations in hopes of adding to their nest egg."

Interested buyers don't have to have a large sum of cash on hand to start investing. In fact, it's even possible to use retirement funds, such as an IRA, to invest in real estate, using an approved custodian to manage the investment.

Many budding investors may not be aware of the stimulus they provide a challenged industry and a struggling economy. Investors reduce the foreclosure inventory, make improvements and provide housing for families that can't qualify for a mortgage. All this adds to the momentum of the current housing recovery.

Anyone thinking of investing in real estate, however, should seek out professional advice and assistance.

"Real estate agents know their communities and can identify the best opportunities. And many real estate agents have obtained specific training to help those looking for investment property," Kelly added.

Many communities that suffered during the housing crisis are now benefiting from increased investor activity.

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