  Low Interest Makes This A Great Time to Buy “Interest rates just crossed a historic threshold. The average rate on a 30-year fixed-rate loan dropped below 3% last week for the first time since records began in 1971.” In the middle of what’s looking to be the worst economic downturn since the Great Depression, now is one of the best times to invest in property as an asset in your investment portfolio. Payments are more accessible and affordable for new property owners, encouraging them to buy. One of the best strategies when getting involved with real estate investment properties or adding to your portfolio is buying while interest rates are low, because it gives you the best chance to maximize your profit margin. Another great option right now is refinancing your investment property.   Rental Properties as Retirement Insurance  Rental properties can provide income prior to and going into retirement, generating cash flow and putting less pressure on savings in a plan like an IRA or 401k. Property can provide more security and do away with the burden of potential future financial stressors. Writing off property taxes through rental-owning expenses can also make property ownership more profitable with less overhead. Whether for personal enjoyment or further financial security, owning now pays off later.  What Is Redlining? Redlining is a term used to define the denial of loans to people of color within certain areas of cities or counties. Banks identified providing these individuals as risky investments especially in providing them loans for properties in areas that they could depreciate the local property value. While illegal for over 50 years with the Fair Housing Act of 1968 alongside the adoption of the Community Reinvestment Act, banks are required to solicit clients of all backgrounds from their surrounding communities. A recent report from The Center for Investigative Reporting indicated that 61 metro areas still use redlining measures, “even when controlling for applicant income, loan amount and neighborhood”.
 Beyond the blatant and harmful effects of discrimination on face value, areas that have been historically redlined continue to miss out on economic investment without capital from banks to improve the property value of the area. Segregated by neighborhood or removed through gentrification, continued practices driving racial inequity in property purchase and investment are incredibly detrimental to our communities.    Numbers can be deceiving, but necessary, in the real estate market. With the state of California so large and diverse, you can find almost any statistic or anecdote you want to justify your perspective. I work to find multiple sources and stories then compare against more reputable or unbiased sources before making a decision on financial decisions or market valuations.  One recent example of this is looking at net migration out of California. While true that there is a net migration of Californians out of the state, the population is still seeing net growth. The numbers and ratios continue to fluctuate from year to year depending on the economic cycle. Understanding the significance of trends, both long term and short term can make a huge difference in understanding market trends making commitments to buy more sound.
--Greg Sharp Greg's expertise can help you make sense of real estate trends and make the best decisions.
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Greg’s August Newsletter
