Real Estate Investment in 2007
The real estate market is not what it was a few years ago. The fact that the real estate bubble has burst means tragedy for some, but a golden opportunity for smart investors. Here is how you can profit in the new real estate market in 2007 and onwards.
The real estate mania of the past few years was characterized by frenzied buying and flipping of properties by developers and other investors. It was the golden opportunity to sell real estate and capitalize on your property's appreciated value. Some people also saw it as an opportunity to ride the wave by buying properties, renovating them, and selling them shortly after. Although some people see those exciting days as long gone, now is the time to really make money from real estate.
Since real estate prices are coming down, it is time to hunt for bargains and start buying. Do not make the same mistake that stock market investors have made by selling when the prices are down. It is time to buy. Although it is harder to sell houses in the currently deflated real estate market, you can profit by buying houses, renting them out to tenants, buying more real estate, and slowly renovating them as the market improves. Then, when the market is hot again, you sell.
Here is how you can profit in the next few years:
1. Buy smaller properties. Smaller properties in emerging neighborhoods hold the most potential to appreciate in value. They are always popular because there are always people seeking a small place to rent as they start out.
2. Set your rent so that it covers your monthly mortgage, property taxes, and other fees. It can be tricky getting tenants that will pay rent that covers your mortgage, but, if you work hard and present them with quality, they will pay. Be realistic when determining the rent. Get a few real estate agents to determine what they think is the right rental price. Then, considering their suggestions, choose the price.
3. Think logically when you receive your rent income each month. Put it aside and build up a capital reserve that you can later use to buy more real estate and/or renovate properties.
This is rough idea of how you can profit in the new property market. Be bold, read up on the market, learn from others, and prepare for huge profits in the coming years.
