Making Money in Today’s Real Estate Market
Posted on February 12, 2009
Filed Under Real Estate Short Sale |
The real estate bubble may have burst, but the fact remains that real estate is still an attractive investment. You just have to be able to look at the advantages that are presented in the down economy.
Some say that the real estate market is in a depression. Others call it a recession. Others are in complete denial. The third parties are usually those in politics or real estate agents. Anyone who is trying to sell a home knows it is bad out there. But the good news is that as bad as it is for sellers, it is a great market for buyers.
Anyone who has money to invest should invest part of it in real estate. There are three different reasons for this: The interest rates are rock bottom and not likely to get any lower, the housing prices are lower than ever and the market will eventually rebound. You can still make money today in real estate; you just have to look at the property as a long term investment instead of the quick buck.
The days of flipping real estate properties that are accumulating so fast in value that you cannot keep up with them are gone for now. They will most likely return, but not for a while. Now you have to work with what you have which is a real estate market in which there are a lot more sellers than buyers. This puts the buyer in the driverâs seat.
Along with the fact that it is a buyers market, you can also work with the fact that the mortgage rates are lower than ever. So you have an opportunity to buy low because the market is saturated with homes for sale and not enough buyers as well as an opportunity to get a good loan package because the rates are low and lenders are dying to make loans so that they can stay in business.
If you have money to spend on real estate, you are in a great situation today in the real estate market. Look at the real estate investment as a long term investment instead of a short, get rich quick scheme. You can make money when the bubble begins to grow again, and it will. The real estate market goes up and down like the stock market. It will rebound.
You can make money today in real estate but you have to make smart choices. Purchase property in areas where the housing prices have remained stable. Also look at the growth in your area. Where is the next boom likely to hit? This is speculation, but if you track trends in the real estate market and do a little bit of a study, you can see the next area where developers will likely target. This is a good place to buy real estate, even if it is just a vacant lot.
Real estate is usually always a good investment, especially if you plan to live in the property. However, it should be looked upon as a good long term investment and not a way to get rich quick.
Heather Seitz
http://www.articlesbase.com/business-ideas-articles/making-money-in-todays-real-estate-market-428349.html
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5 Responses to “Making Money in Today’s Real Estate Market”
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Is it possible to make money as a real estate investor in today’s buyer’s market?
I'm in Atlanta and it has the largest inventory in the country. Some houses go unsold for months, so I was just wondering how these people who rehab and sell for profit make any money these days. Are there some other ways to make money in real estate in a slow market? thanks
it is u jus have to know wut the ppl like and know wut ur doing
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Yeah.
Buy a repoed home. Live in it until its in good shape, and then sell it move on to the next one, as long as you are only trying to flip the home you live in you'll do fine.
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Real estate investing tips-
What’s the "secret"? Whether you’re in a bull or a bear market, you have to buy right.
A Recipe for Success in Any Market:
First, don’t get caught up in the hype. Learn how to find motivated sellers and buy at prices under market value. And make sure you have the right financing. Whether you’re using private money or bank financing, fixed rate is usually better than floating. Also - if you want to reduce risk and create passive income at the same time - only buy undervalued properties that cash flow.
Then, realize you don’t have to be locked into a bubble market. No matter where you live, there are markets around the country that are in cycles very different than yours. These are areas that offer great value and where jobs, population, and property prices are steadily rising… yet the prices still make fundamental sense.
It’s precisely in this kind of market where I did the deals I just mentioned. These happen to be in the western U.S., but there are many great value markets. In the past year, I’ve also done very well investing in cash-flow properties in value cities in the mid-Atlantic states… and even in value areas of my own state, a few hours from where I live.
In fact, the very existence of the bubble markets is fueling the growth in many of the value markets, as hundreds of thousands of people flee crowded and expensive areas and move to calmer, greener - yet often very sophisticated - areas.
These are places where you can get two or three times the property you’d find in a bubble market for one-half or one-third the price. And you’ll pay a lot less in taxes, insurance, and general cost of living at the same time.
It’s an undeniable trend that will persist for years as millions of boomers move into retirement age and as many young people who can now tele-commute head to more affordable pastures.
Look for Value, Growth, Economic Stability, and Quality of Life
Focus on areas that have good characteristics for value, growth, economic stability, and quality of life.
For value, look for communities where the median home sells at a low or reasonable price relative to (1) the median household income and (2) median rents for that type of house. For example, a community where the median home sells for 20 or 30 times cash flow won’t offer many cash-flow opportunities and is likely near the peak of its cycle and ready for a correction.
For growth, look for communities with above-average job and population growth. Immigration from other parts of the country is usually a strong plus when coupled with good value characteristics.
For stability, look for a diversified economy - not just a one-trick pony dependent on the oil industry or movie industry or automobiles. Towns driven by single industries are very vulnerable to downturns in that business.
For quality of life, look for lively "second cities," especially towns with universities. A university is not only a good economic anchor but also tends to lead to a wide offering of cultural activities. Also look for towns that have walkable downtowns… with festivals, live shows, sidewalk restaurants, etc. The "new urbanism" tends to attract retiring boomers as well as young families looking for an affordable but interesting place to live.
Finally, look for cities that stack up well in all these areas. And then, if you want to turn very good profits into grand-slam profits, learn how to execute value plays in the best value-and-growth markets.
http://www.earlytorise.com/2007/08/28/rolling-with-the-opportunities.html
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There are always good investment opportunities in any market. The trick is to find them. In real estate today, you have to locate properties that are well underpriced. Then what you invest to fix them up has to add more value than you put in. A well presented property that is priced low will always find a buyer.
Some investors look for properties that are about to go into foreclosure. If they go into foreclosure the owner will lose the property. If you offer the owner any amount of money, they will be ahead of the game. For example, a property has a fair value of $200,000 a mortgage of $120,000 and the owner can't make the payments because the interest rate on the mortgage has gone up. If the bank forecloses, they will lose their $80,000 of equity. If you offer to buy the property for $130,000 they will walk away with $10,000 cash. You now have a $200,000 property for an investment of $130,000.
There are other strategies. As with any other investment, if you work hard at it, you will do well.
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