Have you been thinking about buying investment property on Oahu? I know several people who have been waiting for prices to drop since 2003, only to watch Oahu single family residence (SFR) and condo prices skyrocket during this decade (see table below).
| Year | SFR Median Price | % Change | Condo Median Price | % Change |
|
2000 |
$295,000 |
1.7 |
$125,000 |
0.0 |
|
2001 |
$299,900 |
1.7 |
$133,000 |
6.4 |
|
2002 |
$335,000 |
11.7 |
$152,000 |
14.3 |
|
2003 |
$380,000 |
13.4 |
$175,000 |
15.1 |
|
2004 |
$460,000 |
21.1 |
$208,500 |
19.1 |
|
2005 |
$590,000 |
28.3 |
$269,000 |
29.0 |
|
2006 |
$630,000 |
6.8 |
$310,000 |
15.2 |
|
2007 |
$643,500 |
2.1 |
$325,000 |
4.8 |
Well, wait no longer. Now is the time to invest and here is why:
The buyer’s market won’t last forever:
- The Oahu market has been resting since 2007. By the time you realize it’s resumed an upward swing, it will be too late.
- Sellers are making concessions to sell their property today. That was a foreign concept in 2005.
- If you missed a chance to buy between 2002 and 2005, put that behind you. You can’t re-live the past, so focus on the great prospects presented by today’s market. Don’t let this opportunity slip away again.
Real estate provides huge benefits:
- Price appreciation for those able to hold property long term. Combining a real estate purchase with patience almost always leads to a good outcome.
- Tax benefits through interest and depreciation deductions.
- Financial leverage. Simply put, you control a huge amount of real estate with a relatively small investment of your own money. You don’t have to split part of your gains with the lender, so the return on your investment is much, much higher.
Mortgage rates are near historic lows. No, you probably can’t get a loan at 5% interest, but 6% may be available. We’ve seen mortgage rates reach 18% in our life time. Believe me, you CAN afford a 6% mortgage. It’s a gift; take it.
Rental demand is strong. Credit guidelines have gotten tighter and tighter, making it harder for people with poor credit to get home loans. As we bring more of our military men and women home from Iraq and Afghanistan, rental demand will increase even more.
In conclusion, it’s a great time to buy real estate investment property. Contact Michael Zimmerman today to discuss your real estate investment needs.
