As mortgage rates remain low and rental rates continue to rise, it’s not surprising that more and more people are thinking of buying investment property. But is now really a good time to invest in real estate? The short answer is a cautious yes. But there are several factors to consider and that “yes” may not apply to everyone. Let’s consider a few of those factors now.

Mortgage Rates

This is a pretty simple concept – the lower the mortgage rates, the more affordable mortgages are. And right now, mortgage rates are staying very close to the historic lows we saw in the last few years. However, the low mortgage rate environment we’ve gotten acclimated to may not last forever.

While rates are likely to remain near historic lows through the rest of this year, it’s nearly impossible to say just how long these extremely affordable rates will stick around. Therefore, with the possibility of rates increasing in the future, it’s not unwise to consider locking something in now.

Of course, that goes for primary residences as well as investment homes, but since investment property loans tend to carry slightly higher rates anyway, locking something in while rates are low could make sense.

Want to crunch the numbers? Explore the idea with your financial adviser or one of our mortgage professionals to see if an investment property loan would make sense for you right now.

The Stock Market

If you’ve been following the news, you’re likely aware that the stock market has been experiencing a good bit of fluctuation lately. With these recent ups and downs, plus major improvements in the housing market predicted for 2016, a lot of people are turning more toward investing their money in real estate instead of stocks.

According to an article from The Washington Post, written by Mark Zandi, chief economist at Moody’s Analytics, homeowners are likely to “enjoy another year of solid gains in house prices.” And unlike the pre-recession bubble, these price gains will be on “very solid foundations.”

“No one is getting crazy mortgages today,” writes Zandi. “Regulatory changes in the wake of the crisis and chastened (thus much more cautious) mortgage lenders make that all but impossible.”

Furthermore, Zandi reports that the issue of negative equity (where the home is worth less than what they homeowners owe on the mortgage) is fading fast.

“At the worst of the problem, close to 17 million homeowners were underwater,” writes Zandi. “By the end of 2016, that should be down to a more typical 5 million homeowners.”

All of this could put a lot of nervous would-be investors at ease.

Nevertheless, despite several improvements, the housing market is still not without some degree of risk. That’s why it’s important to examine the facts, be aware of economic trends, and discuss your financial goals with a professional.

Please note that since we’re not financial advisors, we can’t say whether or not buying an investment property is a smart choice for everyone. For some people, it could be too big of a risk. For others, it could make perfect sense. Again, talk to your financial advisor for more information.

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