Posted by on Wednesday, June 5th, 2013 at 11:41am.
Life can be tough and often complicated. For medical needs, I go to some very good doctors. For taxes, it’s my CPA. For real estate, even as a licensed professional, I use a local Realtor® to transact my holdings in geographic areas in which I am not a specialist.
It’s hard to beat the expertise of the best in field. They may not always be right, but their batting average beats tossing coins in the air. And that difference separates winners from losers.
When it comes to investing, my favorite is the “Oracle of Omaha.” When he invests in certain specific strategies, I listen!
According to Wikipedia, “Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely considered the most successful investor of the 20th century.”
Just Google his name right now if you’re not familiar with his sage advice on a variety of matters. His prescient advice is well respected and well deserved.
But wait! He invests not only in equities, but also in debt. He likes 10-year horizons for determining value, not the current “opinion” by ubiquitous short-term critics. He likes to buy when others are hesitant; his style is “contra.”
Here are his thoughts on interest rates, CNBC, May 6, 2013:
The price of everything determines its attractiveness…. Bonds are priced artificially. You’ve got some guy buying $85 billion a month. And that will change at some point, and when that changes people could lose a lot of money if they’re in long-term bonds…. Someday [bonds] will yield a lot more than they do now. I don’t know when that will happen. It’s going to happen, the question is always when… [And] to what degree it happens. You could have interest rates very significantly different than what they are now in some reasonable period in the future. … It will happen.
So how do we, as real estate investors and owners, take advantage of this?
My thoughts lead to an idea you may or may not agree with, but here goes:
- Real estate prices are on the rise since the bubble popped;
- Market data for real estate consistently shows prices have bottomed out; (See TWT Webinars.)
- Some folks are fearful of investing and, as a result, hold their cash;
- Warren Buffett says that holding your cash is a long term mistake;
- Interest rates are at or near their lowest per both Buffet and bond guru Bill Gross;
- Monthly rental prices are UP in most of the country, and especially in Park City, Utah;
- Inventories have drastically shrunk, and new homes are in even greater demand;
- Our most recent webinar confirms this is happening in Park City; and
- With 20% down for homes, and 30% on townhomes and condos, 30-year FIXED rate financing looks awfully attractive, especially “when” rates go up as Warren tells us will happen.
Park City is such an amazing place, getting your foot in the door as an investor, or buying your dream retirement home at a reasonable price with record low financing seems like a win/win. Won’t you be happy in a 15- or 30-year fixed rate loan when rates rise?
If you’d like more information, or just want to chat about your possibilities, call or email us, no obligation, of course!