I just read the most recent Barron's which prompted me to again write about the REASONS TO BUY VAIL real estate. Interest rates are nearly guaranteed to stay low for another 2 years, and 15 year mortgages are available at 3.5%. I just recalculated my monthly house payment and deduced that for an extra $600 per month, we can refi and have our house paid off in 15 years! This is exciting to me as we struggle to find the bright side of lost investments, try to remain calm amid certain political and economic futures and continually digest a skepticism regarding the financial markets. With interest rates this low and expected to fall further, financing an investment property may be easier than ever.
Reason #2 is more subjective but revolves around the expected volatility of housing prices in Vail and Beaver Creek for the next few years. No one knows when we will find the bottom but given the positive demographics for our area and the fact that the first baby boomer just retired, I think the prospect for continued precipitous declines in value is negligible. Certainly real estate values have room to fall further, but echoing the sentiments of dividend-paying stock investors, why not invest in real estate that can generate a positive current return from rental income?
In the words of the famous Warren Buffet, "Be greedy when others are fearful and be fearful when others are greedy."
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