When to Buy Investment Properties in Declining Markets

by : Judson Voss

The trend in recent months when it comes to real estate has had somewhat of a grim outlook for many investors. We have all witnessed a few ups and downs along the way with far more downs this time around than ups. While the current market may be a dream for most investors that are interested and comfortable with a buy and hold strategy other types of real estate investments are taking a backseat lately as savvy investors find them unfavorable in the current market.

There are signs you can look for that the tides are turning however. Of course you have to pay close attention and be prepared to act quickly once you determine that the time is ripe yet again. One strong recommendation is to study the downward trend and buy, much like when investing the stock market, at the first sign of a change in the trend. Now you don't want to jump the gun and purchase on a hiccup but once you have a good idea that the tides are turning in the local market (the earlier the better in the trend of course) it is time to get back on the horse.

Other investors have decided not to wait for local trends to turn back in their favor and have decided to move on to other markets for their real estate investments. While the industry as a whole has taken a downward turn over the course of the last year it isn't universal. There are pockets and markets here and there that are still alive and kicking. There are a few even that would be referred to as thriving. It is these markets that you would do well to discover, preferably before all the other real estate investors in the region or state discover the untapped potential of this particular market.

At the very least you need to understand the options that are available to you as a real estate investor in markets that are less than thriving. You do have options. One such option is the buy and hold option. The profits are lower up front but can be significant over time. More importantly a buy and hold strategy develops residual income unlike flips that offer only one shot at a great pay off. Another options is to wait out the market. Some investors have the time and money to do that. Others are less patient. Only you can decide which of these applies to you. Third, you can broaden your horizons and invest in uncharted waters. This is a risk to some degree but if you tap into the right market can bring in new money for many years to come. Finally, there is always the option of taking the risk and going all out even in a failing market. This is a long shot at best and almost certain to bring about a high price. However, if it pays off for you, the chances are good that it will pay off very well. I'm not that kind of gambler but if you are, then my hat is off to you. You will need to decide for yourself which of these options is best for you when confronted with a sluggish market.