This is a seriously hurting economy, especially in the real estate market. People are throwing the “R” word (recession) around and are talking about a global scale and long term fall out of the sub prime mortgage mess. There are a few bright spots, however, as every analyst knows; there’s money to be made out there even in a down turn like this one.
Real estate’s reputation has taken a huge hit in recent months, and justifiably so. Some of the less than honest dealings that real estate appraisers and mortgage lenders were engaging in is a black eye, without a doubt. Still, real estate offers a potential safety that no other stock, bond, or commodity can match – not even gold. First of all, there are some things you should bear in mind about this market. Flipping should not even cross your mind. If you think you can buy a house on this market, throw some money into it an make 30,000 or more dollars in a few months, you’re deluding yourself.
First of all, dedicated flippers are finding out the hard way that real estate is not moving the way they want it to. The credit crunch is holding up the process of getting mortgages; this means that while you may be able to get a loan if you really, really need it, your potential market is not as likely to get such an opportunity. Also, most flippers are winding up sitting on their house anyway, so why bother to sink thousands into unnecessary upgrades and improvements if you don’t have to? Second of all, real estate investment should be looked at as a long-term investment for at least the next few years. But that is a good thing and here’s why; real estate will bounce back and people will want to buy again. The old adage in investing in stocks was to buy when you were young and sit on the stock; by the time you retire, you’ll be rich.
This is true for real estate now; buying now will get you in on the ground floor of a golden opportunity to make a long-term, stable investment. Prices now are at a 17 year low and there is no real demand for new houses so your competition is being eliminated. Purchasing a properly located piece of property now will pay huge dividends in the future. Finally, you should understand that your purchase can make you money while you ride out this storm. You may not think you want to be a land lord, but you might want to think about it.
Right now millions of people are losing their houses, but are not about to become homeless. Instead they will be looking to rent. These renters are not just going to be the people who lost their houses because they got in over their heads with a bad loan. Renters are now coming from well-paying white collar people who have to downsize their super-sized life; and here you are with a house ready for them.