Real estate investing is not dead. In fact, it is a hot topic once more. The last two years for most people have been the worst ever, especially to those who are into real estate investing. Over the last two years, they all seem to give up on their investments, but now they want to jump right back in. Who would have guessed?
If you look at the graphs, the housing prices in many cities and states have dropped 20% to 40%, and even 50% in some hard hit areas. The drop resulted to a much more affordable homes. The “bad behavior” on the part of speculators have discouraged and the government has stepped in as well to help people who would like to acquire these homes. But now, real estate investing is back on the upswing. The number of property values started to make sense again.
In this recession, how can one benefit from real estate investing? Let’s do a bit of the math. If you can finance a $100,000 mortgage at 6%, your mortgage payment is somewhere in the $600 range. If you add property taxes and insurance, your monthly outlay would probably be around $750. Now, assuming you can rent that property out for $900 monthly. A cash flow positive investment is more visible now.
Having that real estate investing scenario, it simply does make sense to hold on to that property for 10 to 20 year more and get great financial benefits. Why do I say so. The logic is that outside of general maintenance on the properties, you’re getting someone else to pay for your mortgage. Also if property values increase over time, you could get even more benefits from a big windfall, when it comes for you to sell the property.
It’s safe to say that real estate investing plans have failed for the last several years. Just like any other plans, the plans of people who bought properties at extraordinarily high values did not fall accordingly. This is because recession happened, and the properties have lost their value. More so, no one could re-finance or carry the loan payments any more.
Real estate investing is not for anyone to just go into without thinking. The drastic change of fortunes happened a few years back can happen to anyone. In real estate investing the phrase “location, location, location” is especially true. You need to make sure that the numbers are “pencil in.” Those markets may never come back again. So, if you think you’re going to take a cash flow negative property and hold on for property value increase, you should think again.
Real estate investing should be taken seriously. To help you keep up with what’s up and about real estate investing, a great number of real estate gurus (e.g. Donald Trump, Robert Allen, Carlton Sheets), companies, communities and groups are there. You may want to do a research before following one of them, because scammers are out there too. Just make sure they have been in vesting for many years and followed by many people like you who wants to make money in investing.
Topics: investing in real estate, Real Estate, investing, Real Estate