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Win By Understanding The Real Estate Market Today
By golddaddy | November 4, 2008
Worried about the future of the current real estate market? For the investors who understand how the market is today, it is a great time to make money in real estate.
Real estate is cyclical and always has been. There was a large national article published that stated Las Vegas real estate had completely capped out and there was no place for it to go but down. Ironically, that article was published nearly half a century ago! Has real estate gone up in value in Las Vegas in the last 50 years? Positively and a lot more than a little! Do I mean that real estate markets are going to continue to increase like they have in the past? Don’t plan on it, however I’ll explain the benefit of this type of media coverage and how it is invaluable.
- It creates fear that scares off a lot of people from investing (creating more opportunity).
- It eliminates aggressive scam investments (as we saw rampant with builders in Florida and Las Vegas the last few years).
- It makes people question the value of their properties (creating more flexible sellers).
This is something to think about: I don’t know any successful real estate investors who are afraid of flat or falling house prices? Quite to the contrary, knowledgeable investors understand when markets are flat or down it just weeds out beginning investors, makes people panic and means more opportunity.
What’s important to understand is just as real estate is cyclical, so are the amount of buyers and sellers in a given market.
You just don’t buy houses and hope the value will increase in the future. That’s not investing, that’s speculating! You can be completely relying on future growth and that is often totally out of your control. In a flat or declining real estate market, that kind of conventional mindset will not work especially in the short term. As in every business, a well calculated decision is vitally important. In real estate, that includes making creative, risk free offers and setting up your exits appropriately for the specific investing circumstances.
There are also better creative real estate strategies for down and soft markets like wholesaling, flipping/assignments, lease options, foreclosures, short sales, and “subject to” investing. But even when doing rehabs or fixer uppers (which are not usually recommended in down markets) there are still good ways to make a good profit with the right system and proper planning, such as factoring in depreciation and extended selling possibilities.
This is why faster, lower risk, more creative real estate investing strategies like wholesaling houses are better to use during market declines. The point is market conditions should not determine whether or not you make money; it’s how you approach it and what is appropriate for the circumstances. Real estate market conditions will never be the determining factor for success when you structure risk free deals and make calculated decisions!
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