Housing market cools, will investors? - WALB.com, Albany News, Weather, Sports

Housing market cools, will investors?

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May 26, 2005

Albany- The Federal Reserve warns the red hot housing market could soon cool off. That could be a warning sign to people who turn to real estate as an investment option. Just how risky of an investment is it? A broker says, the local real estate market remains strong.

Neighborhoods like this one in East Albany are full of homes for sale. Homes that could turn into profit for the right investor, but just how easy is it?

"You can't just go out and buy the house because it looks good to you, if the figures don't work, it won't work," said Lavonda Paulk, broker for The Anderson Company Realtors.

This foreclosed house on Brierwood was recently purchased by an investor.

"We were lucky, this was a good buy," said Paulk.

It just needs a little work before it's back on the market.

"Usually you'll find the home just needs what we call window dressing, fresh paint, fresh carpet, new floor," said Paulk.

This house still needs work, the ceiling will be painted, the repaired cabinets will be finished, and the carpets were cleaned. The cost for repairs between two and five thousand dollars.

"Most of the time the value of the home you can borrow enough to do the rehab and let the home pay it back," said Paulk.

Homes that need more work often come at a cheaper price.

"In some cases when you find a house that's in need of some tender loving care, you're going to buy it at a price that will support the new roof, the things that you have to do and still be rentable," said Paulk.

Once the house is finished, it's up to market demand, which Lavonda says is pretty stable in Albany.

"A constant stream of people, not a great crowd, but a constant flow of people coming in and out of Albany," said Paulk.

It worked for the investor who bought this house two years ago on West Sixth Avenue and sold it for profit to a first time home buyer who still lives here. They say the risk paid off.

"It's a little frightening, once you've done it a couple of times its not frightening anymore," said Paulk.

You can buy a home through a broker like Lavonda or on your own. A broker knows the real estate market and which locations are going to sell. Currently, there are more than 67 hundred homes for sale in the Dougherty Lee County area.

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