Real Estate Investing
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.
Of course, what you have planned doesn't work always. That's what happened during the last two years. People who ventured in real estate investing, bought up properties at such high values. Then, market crisis happened. The value of the properties has gone downhill and people couldn't re-finance or carry any more loan payments.
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. - 23204
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.
Of course, what you have planned doesn't work always. That's what happened during the last two years. People who ventured in real estate investing, bought up properties at such high values. Then, market crisis happened. The value of the properties has gone downhill and people couldn't re-finance or carry any more loan payments.
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. - 23204
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.
posted by X - Men @ 2:30 AM
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