Real Estate Investing
Once again, real estate investing is a hot topic. I'm sure you still remember how people suddenly want to give up their real estate investments for the last couple of years. But now, it seems that everybody is jumping back in. No wonder about that, now that a lot of real investing group, not to mention all the crazy buying, is done whirling. Indeed, the last two years were the worst for most people.
Yet, real estate investing is back on the upswing. Why do you ask? Because property values have dropped so low that the numbers make sense again. Housing prices in many cities and states have dropped 20%, 30%, 40% and even as high as 50% in some hard hit areas. This drop in price has made the homes more affordable. The government has also stepped in to help new home buyers purchase these homes. As well as discouraged "bad behavior" on the part of the speculators.
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.
In this simple real estate investing scenario, you can hold onto that property for 10, 20 years and reap great financial benefits. Why could this make sense for people? It works because, outside of general maintenance on the properties, you're getting someone else to pay for your mortgage. And, when it comes time for you to sell, you could be the beneficiary of a big windfall, if property values increase over time.
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.
This is why it's extremely important to know what you are doing in real estate investing. There are several companies, gurus, etc. who purport to tell you how, what, when and how much. Many of the gurus are fly-by-night scammers. They will try to sell you a bill of goods. You should make sure to look at gurus who have been around a while and have a loyal following. Some examples of these people are Donald Trump, Robert Allen or Carlton Sheets. Basically, they've been there, done that. - 23221
Yet, real estate investing is back on the upswing. Why do you ask? Because property values have dropped so low that the numbers make sense again. Housing prices in many cities and states have dropped 20%, 30%, 40% and even as high as 50% in some hard hit areas. This drop in price has made the homes more affordable. The government has also stepped in to help new home buyers purchase these homes. As well as discouraged "bad behavior" on the part of the speculators.
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.
In this simple real estate investing scenario, you can hold onto that property for 10, 20 years and reap great financial benefits. Why could this make sense for people? It works because, outside of general maintenance on the properties, you're getting someone else to pay for your mortgage. And, when it comes time for you to sell, you could be the beneficiary of a big windfall, if property values increase over time.
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.
This is why it's extremely important to know what you are doing in real estate investing. There are several companies, gurus, etc. who purport to tell you how, what, when and how much. Many of the gurus are fly-by-night scammers. They will try to sell you a bill of goods. You should make sure to look at gurus who have been around a while and have a loyal following. Some examples of these people are Donald Trump, Robert Allen or Carlton Sheets. Basically, they've been there, done that. - 23221
About the Author:
Darryl Degenhardt, a well-known professional who almost gave up on real estate investing. Darryl, just like real estate investing, is back upswing once again.
posted by X - Men @ 1:32 AM
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