Hold Onto Your Shirt! Do Not Lose Money Today In Real Estate

Hold Onto Your Shirt! Do Not Lose Money Today In Real Estate
05-27-08

The basic concept of making money is to buy or make something that costs you less than the amount for which you sell it. This is not happening in the real estate market today. People are beginning to panic and sell their homes for a lot less than for what they purchased them. There are actually closings where sellers are coming to the closing with a check instead of walking away from the closing with a check.

Unless you have to sell for some reason, you are better off to hold onto your property in this market. This is a buyers market and it is very difficult to sell your home in most places. Unless you live in an area that is coveted by potential buyers, you will find that your home will stay on the market for twice the amount of time it would have been on the market a few years ago. You will also find that many buyers want to get the property for a lot less than the appraised value. For this reason, if you own property, you are better off not to sell.

This does not mean that you have to stay put, though. It just means that you should not sell. When most people move from place to place they sell one house and put the other house on the market. They often use the proceeds from the sale of the old house as a down payment for the new house.

You do not have to do that. You can take your equity out of your existing home through a home equity loan and use it as a down payment for a new home. You can then rent out your existing home to tenants and hold onto the house until such a time when the market bounces back.

If you have been in your home for a while, chances are that your mortgage payments are a lot less than people are paying for rent in your area. Even with the home equity loan, you can usually have a tenant cover the mortgage and insurance as well as property taxes in their rent. You can then hold onto your old home and still move into your new home.

You will have some responsibilities that come with renting out your home. You will be responsible for any repairs or anything that goes wrong with the place. You will have to claim the rent income but still be able to deduct the mortgage interest from your income tax. Both houses, however, will most likely appreciate in value. When the time comes that it is a sellers market again, which it will, you can then opt to sell the house. You will most likely make a large profit.

Do not panic and sell your property just because the real estate economy is bleak. Hold onto your real estate investment and wait for the market to rebound. The current state of the real estate economy is scary, but nothing that has not happened before.

Mark E. Moebius
Miljonair Homes
Custom home builder St. Louis
3451 St. Albans Rd.
St. Albans, MO 63073
636.300.9000