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Real Estate Investing Basics
Posted by Lorraine Ross on June 5, 2008With the mortgage crisis rearing its ugly head recently, many homes are available at a great value and it is, by some, a wonderful time to invest in real estate. Many real estate entrepreneurs see this as an opportunity to invest in the real estate market with the anticipation that prices will eventually climb and profits will be just around the corner. Many foreclosed homes are available for pennies on the dollar and would allow investors to truly make money if bought and sold at the correct times. As the economy begins to rebound, many families will look to purchase new homes and those who have invested in homes for solely investment purposes will reap the benefits. Mortgage rates are quite low at the moment and loans can be found through dependable lenders throughout the nation in all areas. Although the qualifications to obtain a loan have been tightened, investing in a home is possible even during this time of economic crisis.
Besides those who solely purchase homes for investment, it is also a great time to consider the purchase of a second or vacation home. With prices at historical lows, and inventory at an all time high, a nice second home can be purchased at what would most certainly be considered a steal. It is simple economics, when there are more homes than buyers, prices often drop dramatically as is the case at this time. Homes that are available often cover all price ranges as those affected by the recent mortgage crisis were and are from many different backgrounds. If you are in the market for a second or vacation home, there are many places to investigate as it seems that the homes available are in all regions of this country. It is an amazing sight to see the various options available.
Some initially purchase a home for investing purposes but end up liking the home so much that they keep it for themselves. A second mortgage is not always ideal, but when you know that you wish to visit a particular place and you get a great deal on a home, the investment is a wise one. With the rising cost of travel, including high airfare and gas prices that are out of control, it is nice to know that your lodging is covered and that the mortgage you pay will make you money in the future if and when you decide to sell.
Is real estate still so attractive niche ? As I know according to news value of real estate is unstable and this investments can be risky
I read Lorraines post about the current market being full of opportunites. It’s universally true that in all countries a downturn is paradoxically great news for savvy investors, as they sense that it’s the perfect time to buy
I own several real estate private sale sites in Australia and the market has cooled in my country as in the states.
Plenty of pundits are suggesting that the downturn might even last as long as 2012. This makes it the ideal time to build your portfolio.
Whilst no one wants to benefit from the pain of others the grim reality is that if people are selling distressed real estate they may as well be selling it to you as to the next guy ,right ?
Thanks for this great blog.. as it helps me keep a perspective on the global real estate trends that inevitably affect us inAustralia at some point.
Andrew Blachut
Lorraine
One of the key issues we are facing with our clients is the difficulty in obtaining finance. Our overseas buyers are very motivated to buy, in line with the points you make in your write-up, but they are deterred by the much lower LTVs and the unwillingness of loan companies to work with second or vacation home buyers.
Do you see any relief in this area, and if so, how soon?
Real Estate Investment was also good. As long as you know what would you do and equipped with enough knowledge on Real Estate Investment.
Real Estate investing can be real tricky at the moment due to instability in most major markets. Market research is critical. I would agree that long term it should be a sound investment and this could be the time to find that vacation home.
I also reckon that real estate business can be risky — well, without the proper knowledge of course. Not that I want to be pessimistic; the outcome can be great if the right knowledge is applied in conjunction with discipline.
Lorraine,
I agree, it is a GREAT time to invest! Not only do I help clients invest, but I also invest in homes myself.
Christina
According to Boston City Properties, prices in the Boston Real Estate market have gone up around 5% in Downtown Boston in 2007, from 2006, which was supposedly a big market crash for the country. I also read on the site that real estate in boston have gone up in 2008 as well. Have you heard of any other big metropolitan cities where this has happened as well?
I think it is always a good market. It’s just a matter if it is good for the buyers or good for the sellers. Smart investors ALWAYS buy below market.regardless of waht the market is doing. Of course as the market changes your strategy should change. In todays market buy and hold makes more sense than flipping.
WE do a LOT of work for real estate investors here in Florida.
Many investors buy ugly looking property, and we make it look good again.
I have cleaned many a roof for investors who THOUGHT they needed a new one.
There are bargains galore here in Florida, now is the time to BUY.
Fred, I think this is happening everywhere. One of my friend in Virginia has told me the same story.
Lorraine,
You are correct. One thing I am worried about is the adjustable rate boom that is coming again at the end of the year. I don’t think anyone is at bottom yet until the new wave is done and FNMA and Freddie know what is going on.
I like your website as I am a real estate investor and a real estate broker. My market has not softened to the point where I see great bargains. But I do see areas where investments can be found for pennies on the dollar. The next year could be the time to buy.
Pokeren, It is still hot but a little unstable. I like all the fluctuation because it creates a lot of opportunities for investors and buyers. For investors, it is just like a full time profession and they can decide where to invest and where not to.
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