Since 2005, I have been advising friends, colleagues and anyone else who will listen not to purchase real estate. Although I don’t claim to be an expert on the future or to have uncommon brilliance, I do enjoy reading information. After looking at the data and ignoring all the hype, I realized that property values would not go up. Although nobody can predict the exact timing and magnitude of the crash, I knew it would be significant. The crash was worse than anyone could have imagined due to the incompetence of regulators and the greed of bankers.
These are difficult times for people who have money to invest. Stocks have been volatile and are currently declining. Buying stocks is like gambling in Vegas. For holding your money, bank accounts, CDs and other safe, interest-bearing accounts cost almost nothing. The Fed’s actions show they are determined to keep interest rates low and not allow people to save money.
You might consider buying a house to live in, or renting it. The financial aspect of buying a house is not the only consideration. You’ll also need to think about the quality of the neighborhood, schools, accessibility to shopping and other attractions, as well as the location. The good news about buying a house is the fact that prices for housing are lower than five years ago, and that interest rates have fallen to record levels. Negatives to house buying include the fact that most areas are likely to continue falling and that the economy is quickly becoming a disaster.
These are the same problems that people face when buying a house to invest in. The good news is that in many areas, rents are rising while vacancies are decreasing. This would naturally lead to an increase in the demand for apartments, as banks are keeping their lending limits tight.
There are many other ways to purchase real estate. My favorite is mortgage note. In the past, I have written many articles and blogs about how you can buy a mortgage note (a.k.a. real estate note). Note buyers such as myself are meticulous about checking documents, property condition, and payer credit. Before buying a note. We now have to make educated predictions about the future of the real estate market and the impact of government policies and regulations. It’s never been easier to buy mortgage notes.
These are dangerous times for real estate investments and other types of investments. You need to be aware of your down-side risks. You must still be able pay your bills and provide food for your family if the investment’s value drops. These rocky times are likely to continue for many years according to my research and gut instincts. So plan well.