About 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.
Perhaps you were asking how does real estate investing make sense in this recession period. Allow me to do the math here, 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. Assuming you can rent out that property for $900 a month. From this, you can see that you now have the basis for a cash flow positive investment.
You can hold onto that property for like 10, 20 years and reap great financial benefits as well from that real estate investing scenario. Makes sense, right? Outside of general maintenance on the properties, you're getting someone else to pay for your mortgage, that is why it works. You could also be the beneficiary of a big windfall, if of course property values increase over a period of time, when the times comes for you to sell the property.
It's safe to say that real estate investing plans have failed for the last several years. Just like any other plans, the plans of people who bought properties at extraordinarily high values did not fall accordingly. This is because recession happened, and the properties have lost their value. More so, no one could re-finance or carry the loan payments any more.
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.
In doing real estate investing, it is extremely important to note all mentioned above. Keep in mind that there are tons of gurus (e.g. Donald Trump, Robert Allen, Carlton Sheets), companies, groups and communities willing to help you determine when and how much to invest. Also, be very careful because there are many fly-by-night gurus, who will try to sell you a bill of goods. Just make sure that the guru you are following is in the business for long years and is being followed by many. - 23210
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.
Perhaps you were asking how does real estate investing make sense in this recession period. Allow me to do the math here, 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. Assuming you can rent out that property for $900 a month. From this, you can see that you now have the basis for a cash flow positive investment.
You can hold onto that property for like 10, 20 years and reap great financial benefits as well from that real estate investing scenario. Makes sense, right? Outside of general maintenance on the properties, you're getting someone else to pay for your mortgage, that is why it works. You could also be the beneficiary of a big windfall, if of course property values increase over a period of time, when the times comes for you to sell the property.
It's safe to say that real estate investing plans have failed for the last several years. Just like any other plans, the plans of people who bought properties at extraordinarily high values did not fall accordingly. This is because recession happened, and the properties have lost their value. More so, no one could re-finance or carry the loan payments any more.
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.
In doing real estate investing, it is extremely important to note all mentioned above. Keep in mind that there are tons of gurus (e.g. Donald Trump, Robert Allen, Carlton Sheets), companies, groups and communities willing to help you determine when and how much to invest. Also, be very careful because there are many fly-by-night gurus, who will try to sell you a bill of goods. Just make sure that the guru you are following is in the business for long years and is being followed by many. - 23210
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 @ 2:28 AM
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