Investing in Boom and Bust Markets

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Investing in Boom and Bust Markets
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Where Should You Put Your Money in Different
Market Cycles?
Its important to pay attention to the market you
want to invest in. Thats why when youre
investing in real estate you need to know the
best time to buy and sell.
Is the market right now the best time to invest
in real estate, or should you wait and perhaps
invest elsewhere?
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Market Trends
In 2008, the real estate markets fell pretty
heavily. You could sell and get some of your
money back, but the best choice was to leave it
alone and hope the market eventually climbed once
again.
The markets recover slightly in 2009, but fall
again by 2011. However, the rental market is much
stronger. Now, in 2013, real estate is still
undervalued by about 6-7 in most markets.
However, inventory is now tight, and its once
again hard to find a good deal on rental
properties.
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Invest in Real Estate?
If its so hard to find a good deal on rental
properties, what does that say about investing in
real estate?
Well, buying rental real estate might be
difficult, but getting tenants to sign a
residential lease isnt hard at all. In fact,
people are lining up to rent houses and
apartments right now and there are few to be had.
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Earning a Strong Return on Your Money
If you want to invest in real estate, or you
already are investing, how will you earn a strong
return on your money?
Vacancies are the biggest cost for landlords, so
the best way is to avoid losing money is to watch
out for neighborhoods with high vacancy rates.
Also, you should always maximize tax advantages,
and never buy a rental property that doesnt
instantly offer strong cash flow.
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More People Are Renting
Many apartment buildings have lengthy waiting
lists and are screening tenants as quickly as the
units become available. However, many families
are now looking to rent single-family homes and
are willing to pay a bit more for the freedom and
space of a full house.
Though more people are starting to buy houses now
that the market is recovering and foreclosure
rates are decreasing, many people are choosing to
save money and rent instead.
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Apartments or Single-Family Homes?
Single-Family homes are rapidly becoming the most
desirable renting option for many families.
Apartment complexes are filling up and are not
always the ideal places to raise a growing
family.
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Improving Tenant Retention
If you already own a rental house, there are ways
to keep your tenants rooted down so that you
dont lose money by having an empty unit.
Communicate regularly, but only about important
matters. Respect your tenants privacy and handle
disputes calmly and professionally. Also, if you
have respectful and well behaved tenants, think
about letting them have a little leeway every now
and then if they need it.
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Relatively Cheap Upgrades to Improve Property
Value
If you need to spruce up your rental home to make
it more desirable to tenants, try some relatively
inexpensive upgrades like a gas fireplace or a
second-hand hot tub (all hot tubs are pre-owned
to tenants).
Other light upgrades might include touches like
bamboo flooring, landscaping, or even
smartphone-controlled keyless locks.
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Act Now for the Best Profits
Keep an eye out for good deals on rental
properties, and wait for a property that will
create cash flow immediately when leased. Many
real estate markets are still undervalued, but
inventory is tight in some markets. If you cant
find any good deals, then just bide your time.
Pay down debts and save 10-25 from each paycheck
so that when the chance comes, youre ready!