Boise Idaho Investment Real Estate Information

Tuesday, January 14, 2014

3 things to know about interest rates in 2014

Found a great article on Interest Rates for 2014 on housingwire.com. This definitely pertains to investment properties in Boise ID.

3 things to know about interest rates in 2014
Whether they rise or not, things are going to change

By Trey Garrison January 10, 2014 5:07PM

Interest rates will go up. Or they will stay the same. One of those two things will definitely happen in 2014, economists say, and some lenders and investors may have trouble adjusting to the change.

"We think rates are generally headed up. We have a growing economy both here and aboard,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association (MBA). "We’re going to get some differing data like today’s jobs report which was off, but the next jobs report may see employment up. We are anticipating the job market is going to grow in 2014 and the recovery will continue."

Further, he said, a longer-term factor will be that a growing federal deficit will put upward pressure on rates. And third, the Federal Reserve has already made it clear that if U-3 unemployment goes below 6.5%, it will let rates rise.

"We expect that in the third quarter the Fed will stop buying MBS and Treasurys, and start raising interest rates," Frantantoni said.

MBA is projecting interest rates on the 10-year Treasury yield to go from 3% in the first quarter of 2014 to 3.3% by fourth quarter of 2014, averaging 3.2% for the year, and then creeping up to 3.5% by the last two quarters 2015, averaging 3.4% for 2015.

MBA projects that 30-year fixed mortgage rates will go from 4.7% in the first quarter 2014 to 5.1% by the end of the year, and continuing a slow rise to 5.3% by the end of 2015.

Conversely, economists at international macro-economic research firm Capital Economics say they don’t expect interest rates to rise and that the Fed will keep a tight, tight leash on rates through 2014.

"The world economy has entered 2014 with a lot more momentum than it had a year ago. Business and consumer confidence have improved and unemployment is falling rapidly in several countries. However, while this should eventually prompt central bankers to raise interest rates, we do not expect significant hikes this year," the firm states in its Global Central Bank Watch report. "Instead, the Fed and Bank of England are likely to leave rates unchanged even after unemployment falls below their current thresholds, while both the ECB and the Bank of Japan look set to announce additional policy stimulus."

"The acceleration in growth over the past twelve months or so has been particularly strong in advanced economies In principle, this should pave the way for policy- makers to raise official rates from their current exceptionally low levels, particularly given that some central banks – notably the Fed and Bank of England – have explicitly linked future hikes to progress in reducing unemployment," the Capital Economics report states. "In practice, though, the four major central banks in advanced economies are likely to continue to tread very carefully in withdrawing stimulus, let alone actually tightening policy."

One big concern outside the housing and mortgage universe is that if interest rates rise too high, it could essentially bankrupt the U.S. treasury. The Fed is now printing 29 cents for every dollar the U.S. government spends, and servicing the national $17.3 trillion debt is costly even with low interest rates.

A study last fall by the bipartisan Committee for a Responsible Federal Budget said total interest payments on the federal debt in 2013 were approximately $255 billion. That’s based on the Treasury paying 0.01% on three-month bills and 2.98% on 10-year notes, as opposed to the historical average of 3.3% and 5.2 % respectively.

Frantantoni said typically the Fed has made it clear to the Treasury that it will focus on price stability rather than financing the debt, although he acknowledges there is a concern that interest payments on outstanding federal debt could be an issue. Economic growth concurrent with rising interest rates would serve to ameliorate these concerns through increased tax revenues and stronger job growth.

"We’ve had a couple of unusual years, and a lot of folks in the Fed would like to get back to the role of just minding monetary policy,” he said.

The Iron Eagle Realty Team's mission is to assist you, our client, in the sale and acquisition of real estate properties in the state of Idaho, specifically the Boise Idaho Real Estate Market. Whether you are buying or selling a home, whether it is a foreclosure, short sale or equity property, we handle our customers and clients with empathy and honest truths so they can make informed decisions as they advance in the process of buying and selling real estate that meet specific needs.

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Friday, December 27, 2013

Best Buy Cities: Where to Invest In Housing In 2014; #10 is Boise

Great article in Forbes;

Buying a home can be a great investment, as investors gobbling up properties over the last few years–when prices and mortgage rates were at the bottom–well know. Now, with homes prices and rates ticking steadily back up, investors are backing away from the market, leaving more room for the rest of us.

Perhaps you fear you’ve missed the best time for buying housing. Prices were low last year, but there are still deals to be had. The good news is that less competition for housing and an overall less-crazed market than in 2013, as I wrote about in Housing Outlook 2014: 10 Predictions From The Experts, can make for fairly decent timing for smaller-time investors. The key is to buy where the prices are still low, in cities with a lot of growth potential.

Housing Outlook 2014: 10 Predictions From The Experts
Erin CarlyleErin Carlyle
Forbes Staff

Smart Tax Moves Homeowners Should Make Before 2013 Ends
Erin CarlyleErin Carlyle
Forbes Staff
Whether you’re looking to get into a first home that you’ll live in for a few years, or simply buy a fixer-upper that you can rent out right away, there are still plenty of cities where your money is a fairly safe bet. We teamed up with Local Market Monitor, which tracks home prices and local economic factors in more than 300 housing markets, to put together a list of the Best Buy Cities–the top 20 housing markets to invest in for 2014. To come up with this list, Local Market Monitor pulled data for the largest 100 metropolitan statistical areas (a geographical designation used by the U.S. Census) with populations of at least 575,000. From there, the choices were ranked primarily on four factors: population, home prices, and the local jobs economy. Each of our Best Buy Cities have high population and job growth, relatively low home prices, and are still considered under-valued (although in every case except Virginia Beach-Norfolk, Va., home prices have gone up). This makes them fairly low-risk investment opportunities for buyers who are smart and know not to overpay.

The key to coming up with this list is a proprietary measure that Local Market Monitor dubs the “Equilibrium Home Price.” Basically, it tracks what the average price for a market should be, if speculation, weird distortions in local income, and other factors (like the housing collapse) weren’t present in the market. The measure presumes that prices will eventually return to this level. When homes are far under the equilibrium price, investors are getting a good buy and can expect to make a good return. The other important consideration for investors is, of course, a healthy local economy. After all, there is zero point in purchasing a home in a market where the population is fleeing. That’s why Best Buy Cities are places where opportunities are growing.

“We are at a stage in the economic cycle where job growth–and demand for housing–is accelerating in some markets,” says Ingo Winzer, founder of Local Market Monitor. “The types of jobs created are often lower-paying, most suitable for renters, younger people who are willing to move from somewhere else and who don’t want to own a house right now but might have a young family and would like to rent one.”

Fort Worth-Arlington, Tex., and Dallas-Plano-Irving, Tex., top the list of our Best Buy Cities, at No. 1 and No. 2, respectively. Both cities offer homes that would be within reach for middle-class Americans, at $168,383 in Fort Worth-Arlington and $180,645 in greater Dallas. Prices in greater Fort Worth are considered 20% below their actual value, according to Local Market Monitor. Homes in the greater Dallas region are 12% down, so less off, but they are expected to rise more–29%–over the next three years.

For buyers who intend to rent out their homes, the populations in these cities are growing at a healthy clip: from 2009 to 2012, at 4.9% in Fort Worth and 6.1% in Dallas. At that rate, Dallas is tied for the fastest-growing city on the Best Buy Cities list. It’s ranked fifth in terms of job growth, at 3% as of the latest Bureau of Labor Statistics stats. Driving the demand are companies like Dallas’s One Technologies, LP, an online credit monitoring marketing service that was ranked the fastest-growing private company in the area by the Dallas Business Journal.

“The total eventual returns may be higher in markets that are still under-priced right now–that’s why those are higher in the rankings–but the rental returns should be good in all of them,” Winzer says. “I particularly like the investment markets in Texas and Oklahoma, with their low unemployment rates and ability to profit for years from new shale oil and gas development.”

The Iron Eagle Realty Team's mission is to assist you, our client, in the sale and acquisition of real estate properties in the state of Idaho, specifically the Boise Idaho Real Estate Market. Whether you are buying or selling a home, whether it is a foreclosure, short sale or equity property, we handle our customers and clients with empathy and honest truths so they can make informed decisions as they advance in the process of buying and selling real estate that meet specific needs.

Wednesday, December 11, 2013

Just listed - 6.5% Cap Rate Cash Flow Like New Fourplex in Nampa - Turnkey Investment

Just Listed by The Iron Eagle Realty Team

Cash Flow To Go and You Can't Beat This Location! Almost NEW FOURPLEX located in the heart of Nampa. Four 2 bedroom 2 bath units. All units come with upgraded kitchens and granite countertops. Minutes to I-84, Walmart, NNU, College of Idaho, CWI campuses, etc. One property manager on site. Like New Clubhouse with Workout Area and Pool for tenants. BTVA.

If you are looking for Investment Properties in the Boise, Meridian, Nampa or Caldwell areas, please call or email us.

The Iron Eagle Realty Team's mission is to assist you, our client, in the sale and acquisition of real estate properties in the state of Idaho, specifically the Boise Idaho Real Estate Market. Whether you are buying or selling a home, whether it is a foreclosure, short sale or equity property, we handle our customers and clients with empathy and honest truths so they can make informed decisions as they advance in the process of buying and selling real estate that meet specific needs.

Friday, October 4, 2013

Landlords See Biggest Income Gains

I saw this great article WSJ.com by Kathleen Madigan regarding income gains for landlords. This is very applicable to the Boise Investment Property market.

Landlords See Biggest Income Gains

In this recovery, it’s better to be a landlord or investor than a saver.

That is the message from Friday’s report on personal income. Since the recession ended in the second quarter of 2009 to the average so far in the third quarter, the gains in income have been paced by rents collected by landlords and dividends paid to shareholders.

Since mid-2009, nominal personal income has increased 17%. Rental income has soared 85%, and dividends are up 44%. Retail income and dividends compromise less than 10% of all income, but have accounted for 25% of the increase in all earnings so far in the recovery. Following close behind is proprietors’ income, up about 42%.

Wages and salaries, about half of all household earnings, have grown about 14%, accounting for 40% of the entire income increase.

Some of the divergent growth rates reflect changes in the economy coming out of the Great Recession–trends that won’t last over time.

Dividends, especially from financial companies, were cut almost in half during the downturn. That means dividends were at an extremely low base when the recovery kicked off. Ignoring a tax-related jump in the fourth quarter of 2012, dividend growth has already been slowing.

The rapid increase in rental income likely reflects the surge in investment properties. Small-time landlords and big investment funds have bought up distressed properties and are renting them out to earn income. As many of those homes are sold, look for the growth in rents to ease off–although not anytime soon.

Contrast the windfall to investors with the puny returns to savers.

Interest income is below its level in mid-2009. That creates a drag on total personal income, despite the fact that Federal Reserve data show the level of interest-earning financial assets has held fairly steady in the past five years.

The bane of savers, of course, is ultra-easy monetary policy. Fed policy has helped boost the wealth of the investors who are also benefiting from the growth in dividends. But near-zero short-term rates are battering the finances of savers. And with the Fed staying the course in policy, don’t expect interest income to gain ground for the next few years.

The Iron Eagle Realty Team's mission is to assist you, our client, in the sale and acquisition of real estate properties in the state of Idaho, specifically the Boise Idaho Real Estate Market. Whether you are buying or selling a home, whether it is a foreclosure, short sale or equity property, we handle our customers and clients with empathy and honest truths so they can make informed decisions as they advance in the process of buying and selling real estate that meet specific needs.

Saturday, September 28, 2013

Why You Should Be Investing Your Money In Real Estate

Why You Should Be Investing Your Money In Real Estate

Found this great article on Entrepreneur.com by Mark Kohler. Here is the link.

As entrepreneurs find success with their primary business ventures, many search for the proper investments for their profits.

Of course, we can and should all start traditional tax preferred vehicles like an IRA and 401k. These are the bedrock of good 'benefit' planning for ourselves and our employees. I'm also convinced more entrepreneurs should consider rental real estate as an important part of their portfolio.

I realize many business owners shrug off this concept after the recent downturn in real estate values, but let me list a few reasons that may change your mind:

1. Gain more leverage. Real estate is one of the few investment vehicles where using the bank's money couldn't be easier. The ability to make a down payment, leverage your capital, and thus increase your overall return on investment is incredible.

2. Grow, tax-free. Buying rental property based on speculation of its value is a dangerous tactic since cash flow is the key. However, appreciation over the long-run is certainly realistic and at the least you should be considering a tax-deferred strategy. In the future, you may even consider a 1031 exchange, charitable trust, or an installment sale to lesson your tax liability further.

3. Tax free cash flow. It's no secret that because of depreciation and mortgage interest deductions (if you leverage your capital), your cash flow should be tax-free. That's right! The far majority of the time an investor will never pay taxes on their cash flow and can wait for capital gains on the sale of the property in the future.

4. The tax write-offs against your other income. Depending on your classification as an Active Investor or Real Estate Professional and your income level, there is a good chance your rental property will not only give you tax-free cash flow, but an overage of tax deductions you can use against your other income. With that said, this is something you want to discuss with your tax professional before investing so your expectations are realistic.

5. Increased tax deduction strategies. Rental property affords investors with another incredible opportunity to convert personal expenses to potentially valid business deductions. Don't forget that rental real estate is a business. This means that travel expenses to check on your properties and payments to family members who manage your properties (such as students away at college) can be deductible and increase the tax benefits when it comes to cash flow and the future sale of the property.

6. Rental real estate is a forced retirement plan. Americans are terrible savers. We lack the self-discipline to put a monthly deposit into our IRA, SEP or 401k as small-business owners. However, buying a rental property is a significant commitment that you are required to commit to and maintain. You will always be grateful in the long-run when you don't give up on it and build future cash flow and wealth.

I meet with a lot of successful entrepreneurs, and almost every one of them has taken profits from their businesses over the years to invest in rental property. Based on this fact and the list above, I have consistently urged my clients to buy one rental property a year and already have clients with rental properties earning them money they never imagined they'd have.

The far majority of us will never get rich overnight. It takes long-term investing and a diverse portfolio to build true wealth. Don't forget real estate as an important part of the equation.

The Iron Eagle Realty Team's mission is to assist you, our client, in the sale and acquisition of real estate properties in the state of Idaho, specifically the Boise Idaho Real Estate Market. Whether you are buying or selling a home, whether it is a foreclosure, short sale or equity property, we handle our customers and clients with empathy and honest truths so they can make informed decisions as they advance in the process of buying and selling real estate that meet specific needs.

Friday, September 20, 2013

Boise Idaho Fourplex Market Update - Prices, Interest Rates, Cap Rates, Etc.

Boise Idaho Fourplex Market Update

Since Jan. of 2013, interest rates for buying fourplexes have increased about 1% from the low 4's to the low 5's. So the spread between interest and cap rate are now becoming too narrow for an acceptable cash flow. So, either rates need to come down (don't know if that will happen) or cap rates need to go up, which means prices need to come down. However, to maintain current pricing, rents to need to go up as well which is happening but not fast enough to compensate for interest rate increase.

The Iron Eagle Realty Team's mission is to assist you, our client, in the sale and acquisition of real estate properties in the state of Idaho, specifically the Boise Idaho Real Estate Market. Whether you are buying or selling a home, whether it is a foreclosure, short sale or equity property, we handle our customers and clients with empathy and honest truths so they can make informed decisions as they advance in the process of buying and selling real estate that meet specific needs.

Tuesday, September 10, 2013

5 Red-Hot Housing Markets That May Surprise You | InvestingAnswers

Here's a great article that I found about the best markets for real estate investments.

5 Red-Hot Housing Markets That May Surprise You | InvestingAnswers

By Miranda Marquit
September 03, 2013

When my husband and I bought our home, prices were near their peak in our area.

At the time, we had no idea that home prices in our market were near the peak. We thought we were buying in an area that had potential. We bought in a new subdivision. The town was expanding. Things were starting to blow up.

Unfortunately, at the time, we didn’t exactly have our fingers on the pulse of what was happening. We didn’t realize that housing permits were dropping in number, or even that employment was stagnating in our area.

A year later, the financial crisis changed everything for everyone, and now, several years later, our home’s market value is $13,000 less than we paid.

We learned a valuable investing lesson from this experience. We learned that it’s important to pay attention to more than just (possibly) bubble-inflated prices -- and to carefully consider where we are buying to ensure that the housing market in the area really is on the way up.

Perhaps most important, we learned that it’s often best to buy closer to the bottom of a market. That's when you can find the best deals. In fact, my colleague Nathan Slaughter -- editor of Street Authority's High-Yield Investing newsletter, says if there was ever a time to invest in real estate, it is now. To put it bluntly, if you wait too long, you could miss out on a ton of potential profits from an opportunity that only comes along once every couple of decades. (Click here to learn more about his exclusive report.)

With that in mind, here's a list of markets that are booming right now. Next time we decide to buy -- or rather, if we decide to buy again -- we will research the situation more, and we will look for markets that recently saw bottoms but are truly heading higher.

Places like…

Phoenix, Arizona

According to the NAHB/First American Improving Markets Index (IMI) issued on August 6, 2013, Phoenix is one of the 247 metro areas in the United States showing improvement in housing. Prices have improved 34.8% from their trough in 2011. This improvement is solid, but it also means that there are plenty of undervalued homes available in Phoenix.

On top of that, the IMI notes that permits have increased 3.4% and employment has improved 6.6% from their troughs of recent years.

There is solid, but undramatic improvement, and it’s possible to get some good deals in this popular area.

Odessa, Texas

Texas has been on a lot of lists lately, with its cities showing signs of solid economic growth and housing market recovery. One of these towns is Odessa.

According to the IMI, Odessa has seen a 27% improvement in prices since its trough in late 2010. Permits are also on the rise, gaining 29.9% since 2009. This means that you might have a choice of newer homes to choose from, as opposed to Phoenix, where there is still something of a glut of existing home inventory.

Employment is growing as well. Odessa has experienced 29.1% employment growth since its 2009 bottom.

Bismarck, North Dakota

This town might be considered by some to be located in the middle of nowhere, but it has made its mark in the aftermath of the financial crisis.

North Dakota is one of the states that didn’t see a huge drop in employment, and that was sheltered, to some degree, from the worst of the recession. But the housing market is still blowing up in Bismarck. Indeed, home prices are up 29.4% from their trough in early 2010, and permits are up 41.8%. The IMI also says that employment is also still improving -- up 13.9% from its trough in 2007.

Boise, Idaho

I’m from Idaho (but not Boise), so I found it interesting that Boise was represented on the IMI’s list of improving markets. When I considered the hit my uncle took when he sold his house during the recession, though, my surprise evaporated. After all, a market that ended up being smashed can make a great opportunity later, when you catch it on the upswing.

Boise has seen a 26.4% improvement in prices since the trough it reached in 2011. Permits are up 3.8%, and employment has improved 8% since their 2009 troughs. As with Phoenix, one way to look at these stats is to realize that there are plenty of good deals to be had on existing homes.

Detroit, Michigan

Yes. Detroit. Really.

In spite of concerns over the city declaring bankruptcy, the housing market in Detroit is starting to heat up, probably due to the fact that there are people like Donald Trump who think that Detroit is worth investing in right now. It might not be a poor choice.

Home prices have rebounded 24.5% from their 2011 trough, and permits are up 10%. Even employment is improving, gaining 6.6%, according to the IMI, from the 2009 trough. If Detroit really is on the verge of a renaissance, now might be the time to get in on it.

The Investing Answer: Now is the time to start thinking about investing in real estate -- or even buying a primary residence. Prices, although up from their troughs in many markets, are still far from their pre-crash peaks. That means that, with the right research, you could get in now, while the markets are starting to blow up. You can get a good deal and even possibly see decent appreciation in the future.

P.S. -- As I mentioned earlier, don't miss Nathan Slaughter's exclusive report on what we call "Renter Nation." And remember: If you wait too long, you could miss out on big potential profits from an opportunity that only comes along once every couple of decades. Click here for all the details.

The Iron Eagle Realty Team's mission is to assist you, our client, in the sale and acquisition of real estate properties in the state of Idaho, specifically the Boise Idaho Real Estate Market. Whether you are buying or selling a home, whether it is a foreclosure, short sale or equity property, we handle our customers and clients with empathy and honest truths so they can make informed decisions as they advance in the process of buying and selling real estate that meet specific needs.