Investment chances abundantin local real estate



    High appreciation in the Provo/Orem real estate market provides profitable investment opportunities to BYU students, according to local real estate and mortgage agencies. Although buying a home is difficult for students, careful planning can make a home a reality.

    Brent Demille, a real-estate agent at Mansell & Associates, said Provo enjoys approximately a 60% appreciation on homes.

    “It makes a lot of sense to go ahead and purchase (a home) as an investment,” Demille said.

    He feels both condominiums and homes are good investments for students who can afford to buy or for upcoming graduates who are planning to buy.

    Stevan Davis, a loan officer at Medallion Accubank, said buying a home is a good investment for students because home buyers enjoy a tax advantage of being able to deduct all their interest.

    Davis said three main steps are necessary for students preparing to buy a home. First, protect good credit rating by making all payments on time. Second, save a minimum of five percent of the value of the home in your price range to cover the down payment and closing costs. Third, plan to make a sufficient income to handle the monthly payments of the size of home you want to buy.

    These three tips help students overcome obstacles in buying real estate, Davis said. He said income is the largest obstacle students face since most students do not work or only have a part-time job. However, many married students purchase a home because their spouse has a full-time job.

    Demille said another obstacle students face is instability. Most students do not plan to stay in the area very long, and they are concerned they won’t be able to sell the house when they leave.

    “It makes no sense if (the student) stays for a year or less. Two to three years or more is necessary to make a good investment,” Davis said.

    Dave Holman, a loan officer at Mortgage Associates, said instability is also a factor when mortgage companies look at financial security.

    “Perfect credit and job security are very important to obtaining a loan,” Holman said. He said mortgage companies want people who apply for loans to have had a stable job for quite some time.

    One option several students have taken, Demille said, is to buy property that needs to be fixed up a little. Students are more likely to be able to afford the property, and they can sell it for a profit once they have made the necessary repairs.

    Holman said, quite a variety of loans are available. Some loans are approved by the Federal Housing Administration and are backed by the government, while others are conventional loans which are backed by private investors. The administration approved homes have stricter guidelines to protect the government from losing money.

    Several loans have provisions that require students to come up with a minimum of three percent of the down payment, and students can come up with the other two percent from gifts from friends or family members, Holman said.

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