The Real Estate Encyclopedia
Why this is a great time to invest in real estate?
Category - Real Estate Information Sources - Real Estate Articles

The stock market is in turmoil and investment banks have one foot in the grave and the other on a banana peel. Even gold and silver are tanking. Itís a downturn in the economy with huge implications. But youíve got some nice, liquid assets and you know you can make a profit in this economy and you know real estate is going to be your best bet; you can almost smell it.

Yes, real estate has taken a huge hit over the past few months, especially since September. Yes, the over-inflated ridiculously high prices are now a thing of the past. That means that prices are at lows not seen in decades. Itís your own little financial time machine where you travel back to 1994 with dollars made in 2008.

Need more proof that real estate is going to be an investment safe haven? Letís look at a hypothetical, but plausible, scenario. A person who could not afford a house bought one with no down payment and suddenly could not make the payments anymore. Other than their mortgage (which was really just rent anyway) got too high, they moved out Ė no skin off their nose to walk away from a property they could not afford in the first place. But now they need a place to sleep, cook, and park their car. They are going to be looking for a place to rent. Rent is basically what they were paying in their old house anyway, so the payments you are going to be asking right now are going to seem reasonable. Hereís another reason; renters outnumber rentable places in every metropolitan area in the country; even rural areas are able to pick and choose who they can rent to. It is a landlordís dream now. Itís also an investorís dream. The old wisdom of how to make money in the stock market was to buy low and sit on your investment for a good, long while. Eventually the price went up and when you cashed in your small down payment had ballooned into a huge net windfall. The same is going to be true about the real estate market. Right now, those places that went for unbelievably high prices are coming back down to earth with a bump.

All you need to do is find a promising area that will be the most likely to come back (because we know real estate will definitely come back) and ride out the storm, holding on to your little investment. You may need to spruce the place up a bit before the renters move in, so you will want to offer a discount on the asking price; weíd recommend a 10%, 15% or even 20% discount on the price. This is to hedge against a further devaluation of property in the near future while saving you money for the long run. Once you got your place, you will be sitting pretty for the inevitable bounce back in the economy.


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