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Buyers are snatching up investment properties right and left, but you don’t have to take our word for it. The latest survey put out by the National Assoctiation of Realtors confirms what we have known for two years. The Vacation and Home Buyers Survey has revealed a 64.5 percent growth in sales of properties used strictly for investments. Nearly 1.3 million properties are now owned by investors, families, retirees and others trying to capitalize on available properties like those in Jacksonville, Florida. The allure of buying investment property is creating new income streams for new and experienced investors that plan to hold properties for many years until prices rise again.
Facts of the 2011 NAR Survey
According to the published data, the average person that buys a vacation home is 50 years old. These investors earn a higher than national average annual salary. Both experienced and inexperienced investors were polled in this survey and many lived less than 300 miles from the property that they purchased. Cities like Florida with the highest foreclosure rate for single family homes were selected to help calculate this data.
The investors that do not live near a vacation home or investment property lived 500 or more miles away. Much of the latest rise in the numbers is due to out of state investors getting into property investing. Among the total number of investors surveyed, a high percentage claimed that they plan to hold the property for a period of up to 10 years. It makes smart business sense to hold a property for a decade while the interest rates and property values are at record lows.
Over 42 percent of the properties that were purchased were located in southern states with Florida leading the pack. The largest population of citizens is between 40 and 49 years of age at 43.5 million. This is followed by 42.1 million for 50 to 59 years and 40.2 million for 30 to 39 years of age. These numbers help prove that young adults as well as adults planning for retirement are taking advantage of low property investment prices to snag profits before the prices rise in the next 1 to 2 years.
Why 2012 is the Year to Buy Investment Property
Markets are stabilizing and starting to grow. There is talk about raising interest rates as the economy is now showing signs of an upswing. Buying properties before rates rise and prices begin to go up is one of the easiest ways to earn a long-term income. Real estate is one of the only investments that you can make that will appreciate in value each year.
The average annual return for a rental or vacation property is between 10 percent and 25 percent. These numbers are 2 to 3 times greater than the average stock market investment. Buyers that are deciding if real estate is for them should make an informed decision quickly to get started before the current real estate availabilities dry up. Both domestic and foreign investors are clammering in hot markets to buy up available properties to get an edge up on competitors and procrastinators.