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?
Real estate investing has leaped forward and finally back upswing. How so? It is because the numbers of property values, that have dropped so low, have started to make sense once more. Tracing back, housing prices have dropped big time, ranging from 20% to 50%, which has made the homes more affordable to acquire. To help new home buyers buy these homes, the "bad behavior" on the part of the speculators was discouraged and the government has also stepped in as well.
Perhaps you were asking how does real estate investing make sense in this recession period. Allow me to do the math here, 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. Assuming you can rent out that property for $900 a month. From this, you can see that you now have the basis for a cash flow positive investment.
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.
It could happen to anyone. "It" being the drastic change of fortunes. Not anyone can just go into real estate investing haphazardly. "Location, location, location," an old phrase that is especially true in real estate investing. It's important to make sure to "pencil in" the numbers. If it's convincing that you're going to take a cash flow negative property and hold on for property value increase, think again. Those may never come back again. "Those" being the market.
In doing real estate investing, it is extremely important to note all mentioned above. Keep in mind that there are tons of gurus (e.g. Donald Trump, Robert Allen, Carlton Sheets), companies, groups and communities willing to help you determine when and how much to invest. Also, be very careful because there are many fly-by-night gurus, who will try to sell you a bill of goods. Just make sure that the guru you are following is in the business for long years and is being followed by many.
Real estate investing has leaped forward and finally back upswing. How so? It is because the numbers of property values, that have dropped so low, have started to make sense once more. Tracing back, housing prices have dropped big time, ranging from 20% to 50%, which has made the homes more affordable to acquire. To help new home buyers buy these homes, the "bad behavior" on the part of the speculators was discouraged and the government has also stepped in as well.
Perhaps you were asking how does real estate investing make sense in this recession period. Allow me to do the math here, 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. Assuming you can rent out that property for $900 a month. From this, you can see that you now have the basis for a cash flow positive investment.
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.
It could happen to anyone. "It" being the drastic change of fortunes. Not anyone can just go into real estate investing haphazardly. "Location, location, location," an old phrase that is especially true in real estate investing. It's important to make sure to "pencil in" the numbers. If it's convincing that you're going to take a cash flow negative property and hold on for property value increase, think again. Those may never come back again. "Those" being the market.
In doing real estate investing, it is extremely important to note all mentioned above. Keep in mind that there are tons of gurus (e.g. Donald Trump, Robert Allen, Carlton Sheets), companies, groups and communities willing to help you determine when and how much to invest. Also, be very careful because there are many fly-by-night gurus, who will try to sell you a bill of goods. Just make sure that the guru you are following is in the business for long years and is being followed by many.
About the Author:
Darryl Degenhardt has just got into real estate investing when market crisis started to happen. He almost dump his real estate investments. He is now a happy man like he used to be, now that his investments are starting to make sense once again.
