Friday, August 31, 2007

A Win-Win Situation

Real estate investments not only deliver profits in an up market, but down markets can yield attractive returns as well.


During an appreciation cycle, it's quite easy to make a profit. As the demand for housing goes up and inventories run low, upward price pressure follows. Successful investors understand the up and down cycles of real estate and use this predictable movement in the market to capitalize on buying and selling opportunities. Note: It can be risky to buy too late into the up cycle because real estate corrections are inevitable...what goes up will come down...so timing is the key.


THE BEST TIME TO BUY IS IN A DOWN MARKET. Investing is all about buying low and selling high. A down market provides the most opportune time to find and buy properties that have the greatest potential for appreciation. The most successful investors understand and implement this strategy to get the highest returns on their investments. This is a strategy I've personally used and have benefited greatly from it's execution. Another benefit of holding property in a down market is the increased demand for rentals. As foreclosures rise, banks lose a tremendous amount of money resulting in tighter lending practices. As it becomes harder to borrow money to buy homes, many families are forced to rent until the lending environment improves. This is a great opportunity for investors to get premium rents for their rentals and reduce their vacancies. Interestingly enough, the rich are buying property when the masses are selling, and the rich are selling when the masses are buying. These contrarian buy and sell moves by the rich should be followed by all. The rich get richer for a reason...follow their actions and you too can be on the right side of the buy and sell transaction.