While there is an abundance of property investment opportunities throughout the nation, let’s examine the Arizona real estate market more closely. This is a very interesting market because Arizona is one of the Top 3 leaders in this country for short sales, foreclosures, pre-foreclosures and bank owned homes. Canadian investors are taking full advantage of this downturn in the economy.
The main goal in investing in property is obviously to make a profit. As most already know, the best way to achieve this is to buy when the market is at the bottom and sells when the market has peaked. This is particularly applicable to the Arizona market as property is selling at severely low prices right now. There is huge opportunity to make a profit and one should not pass up on this lull in housing prices.
If you are trying to flip a house and turn a quick profit, your risk is clearly higher. Many investors try to buy properties at 20% below their current market value and turn them around for a profit. This is hard to accomplish and one will definitely need an experienced agent who can produce excellent research. When considering a home do not forget that you will probably have to put some money into fixing up and updating the property before you are able to put it back on the market. Luckily, if this is not your first home purchase your risk is reduced immensely. It is evident that when purchasing a secondary home you will be buying low and you have time to consider when to sell at a high in the market.
One of the most active foreign investors at the moment is the Canadian investor. With its close proximity and the harsh winters it is not surprising. Many Canadians are purchasing second homes or a retirement option instead of trying to gain speedy profit.
While it is harder to receive financing as a foreign investor, it is not impossible. There are many banks and lending institutions, which will provide financing to foreign investors and most of them require between twenty five and thirty percent down payment. As always, cash is King!
While there has been a significant downturn in the national housing market things do seem to be stabilizing, at least partly, in some areas. There are even areas in which the market has seen increases, albeit small. And obviously, there are still areas in which home prices are on the decline. All of this relates to Arizona and is relevant in most parts of the country as well. Many investors may be waiting for home prices to decrease even further. However, this may not be the best idea especially if you are considering financing your purchase. The interest rate has practically bottomed out and has nowhere to go but up from here. Therefore, even if home sales do decrease, the increase in the interest rate will make that decrease negligible.
While there is a large amount of inventory from foreclosures, many banks still have hundreds of homes that they have not put on the market. They are trying to protect the market from flooding it with even more properties. These bank owned homes are great investments and will slowly be released onto the market. Additionally, there are most likely many foreclosures to take place.
The economy is on the rise and has been helped by the government’s stimulus package. Additionally, many new rules and laws are being enforced which is helping to boost the economy. Despite all of this, the recovery is still moving at a very slow pace.
The economy is fluid and continually going through ebbs and flows. For example, in the mid 2000’s home prices increased anywhere from thirty to fifty percent in some areas. This market is helping to rectify the over inflated prices of these properties and creates a great opportunity for Canadian investors.