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Copyright © 2006 by Bob Schwartz San Diego real estate broker Certified Residential Specialist
Promotions Unlimited All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement. | | What Happens In A Real Estate RecessionThe number of houses on the market GREATLY outnumbers the number of potential buyers. What does this mean? A nationwide recession for the real estate economy. However, the circumstances have become so poor in San Diego and Miami that many are predicting a full blown depression causing mass panic in terms of investing.
Real estate investors who were really raking in the money during the high times are now seeing the market at rock bottom. Many real estate investors have given up real estate investing and have turned to other investments. However, there has actually never been a better time to invest in real estate than right now, for two reasons.
The first reason is that a real estate recession causes homes to decrease in value. They will go up again, but it will take a few years. In the meantime, a smart investor who is looking for a long term investment, can purchase real estate and either rent it out to other individuals who need a place to live or live in the property. If the property is vacant land, it can just be left alone. There is a lot more real estate for sale than there are buyers. This means the prices are lower than if there were more buyers than homes. Take advantage of this fact and buy something.
The second reason why this is such a great time to purchase real estate is because of the low interest rates. The interest rates for mortgages have never been less than they are right now. And because people are not investing in homes and have pretty much saturated the refinance market, lenders are desperate to make loans. If lenders cannot make home loans, they go out of business, plain and simple. They are willing to make a lot of deals that they were not willing to make 20 years ago. Even people with less than good credit can get home loans, so if you think your poor credit is going to stop you from getting a home, think again.
Smart investors are thinking of this market as a reason to invest. Real estate is a tangible asset and something that everyone needs. We all need a home. If you do not want to live in the home yourself, you can rent the property to other individuals. If you choose to rent to tenants, you might want to institute a rent to own policy in which part of the rent the tenant pays you goes towards the down payment of the property when the tenant is able to purchase the home. There is a time limit on this and this presents a tenant more of an incentive to pay their rent on time as well as take care of the property.
If you are looking for a home in which to live, this is a great time to invest. You can get a lot more bang for your buck, especially in upscale neighborhoods that were hit hard by the recession. And because the interest rates are so low, you will be surprised at how much you are able to afford. A real estate recession is tough, but this is a good time for smart investors to buy low and wait out their investment for the long term.
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