Many people want to know "When is the right time to buy real estate?" Over the constant flow of information related to home prices, interest rates and discussions of buying or renting, it can be a challenging decision. In fact, if you wait for the "right time" to buy real estate, you may still be waiting ten years from now. Despite what you may hear, you don't need a crystal ball to make money in real estate and there is no ideal time to buy. With simple strategies, you can make solid profits in real estate, no matter how cold the market seems to be or what you may be hearing in the news.
Buy Wholesale
The point is that real estate purchases take place every day, even when markets for both residences and investments are seen as cooling off. Recently, in fact, home sales have continued to be solid even if prices in some markets have leveled off or declined. The same investing principles apply in both hot and cold markets - purchase at a low or "wholesale" price, and sell at a high or "retail" price.
There will always be motivated homeowners who need to sell their property for any variety of reasons, including relocation or a shift in investment strategy. During this time, they may be willing to let their house sell for well below current or actual market value. There are always houses that can be bought wholesale, and then either re-sold ("flipped") or purchased as an investment.
If you decide you would like to buy a home to flip, you can purchase the property and sell it on the same day in some areas or use a realtor to help with the sale. The key to wholesaling is locating deeply discounted properties that are easy to rent or flip, and they are always there in some way in all markets. There will always be good homes available at the bottom price of the market!
Long-Term Strategy
It is inevitable the real estate market will slow down in all areas at some point. Real estate is a commodity, and there are natural business cycles in every commodity. When the real estate market does start to slow down, many investors are tempted to sell their properties for what they can and get out of the market. Short of panic, they may still believe that the market has hit a high that cannot be reached again. However, you can purchase and rent out that property and still make money through continued cash flow and even modest price appreciation.
Renting out an investment property will usually net you a positive cash flow, increase your equity with every mortgage payment, and even make tax-deductible improvements that increase the property value. When market prices begin to rise again, which they always seem to do, you have a property that has cost you little or nothing to maintain, and has increased in value along with your equity.
The real estate market will always have its highs and lows. Currently, although the market may seem to be slowing or modestly decreasing in many areas, it is really just a matter of time until the market becomes positive again. By creating a solid long-term investment strategy that includes real estate as a component, and by sticking with that plan, you will make current profits and be solidly positioned for gain when the market rises again.
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479
Date Published :
Nov 20 2009