Real Estate Investing For Long Term Gain.
News flash: Real estate is in a downturn. Prices are dropping. Does this mean that you should get out of Real Estate investing? No this is actually the BEST TIME to increase your property portfolio. When you are buy property it does not really matter whether the market is up or down unless you are trying to do a fast turn over. If you are holding for the long term then you have to deal with the market fluctuations with an inevitable upward trend at some point. If you can buy at the lower end of the cycle that is the best time to buy of course.
If the market is experiencing a major downturn it is a great time to be buying due to a vast number of bargains. You can buy at rock bottom prices. However, do not get too negatively geared because this is how most investors get themselves into trouble in the first place. Go for positive gearing. In other words make sure your rental income equals or exceeds your outgoing expenses, to include mortgage payments. If you have other income you may be able to stand an extra $100 or more per month to top up the mortgage but try to avoid it. Negative gearing is ok if you have a really good income and a tax problem.
Ok we all know that in a strong market, when the prices are going up, our property value also climbs. However now, in a slower and declining market you need to change your focus to hold for a longer period. We are looking at a few years before a more friendly market for investors shows up on the horizon.
Focus on positive cash flow and steadily increasing returns. This is a long term game. Property investing is a business. You need a decent return on investment and you need the rental return to cover or nearly cover the new mortgage expense.
Having said all that, we cannot avoid the fact that with good research and due diligence the depressed market presents investors with the GREAT opportunities to build a portfolio of properties for long term gains. - 23204
If the market is experiencing a major downturn it is a great time to be buying due to a vast number of bargains. You can buy at rock bottom prices. However, do not get too negatively geared because this is how most investors get themselves into trouble in the first place. Go for positive gearing. In other words make sure your rental income equals or exceeds your outgoing expenses, to include mortgage payments. If you have other income you may be able to stand an extra $100 or more per month to top up the mortgage but try to avoid it. Negative gearing is ok if you have a really good income and a tax problem.
Ok we all know that in a strong market, when the prices are going up, our property value also climbs. However now, in a slower and declining market you need to change your focus to hold for a longer period. We are looking at a few years before a more friendly market for investors shows up on the horizon.
Focus on positive cash flow and steadily increasing returns. This is a long term game. Property investing is a business. You need a decent return on investment and you need the rental return to cover or nearly cover the new mortgage expense.
Having said all that, we cannot avoid the fact that with good research and due diligence the depressed market presents investors with the GREAT opportunities to build a portfolio of properties for long term gains. - 23204
About the Author:
Doc Schmyz has done real estate deals all over the US. His website shares Real estate investing information for all over the US. Find real estate information by state
posted by X - Men @ 10:06 AM
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