How You Can Invest In Real Estate During A Recession

How You Can Invest In Real Estate During A Recession
05-27-08

Just because the real estate market has plummeted into a recession is no reason to give up on real estate investing. In fact, just the opposite is true. There has never been a better time than now to grab onto some real estate bargains and invest for the long term.

During the real estate boom, many people were investing in real estate for a very short term. In some cases, investors were contracting for homes to be built in desirable areas and then selling them to a buyer who wanted to live in the home right after construction of the home was completed. Holding on to a piece of property for a very short term and then selling it right away is called flipping. This practice reached its peak in the early part of this century when everyone was taught how to get into the real estate investing game.

Some people did make money in this type of real estate investing. More lost money. The range of foreclosures that are all over the market attest to the fact that the entire investment frenzy created a false economy for homes, especially new construction. This actually caused the collapse in the real estate industry. Now the residential real estate market is in a full recession.

The way to invest now in real estate is to invest in property the old fashioned way - as a long term investment. Real estate is mean to be a long term investment and is a very good one for several reasons. One reason is that real estate values tend to rise along with inflation and the cost of living. Even homes in blighted areas rise in value over a period of 20 years.

The other reason that real estate is such a good long term investment is that it is useful. You can rent the property to others or live in it yourself. If you are renting, you are paying a mortgage for someone else. This is the best time ever to stop renting and buy a piece of property. As you need a place to live anyway, you might as well buy and pay yourself. You can not only have a great long term investment, but a roof over your head as well as tax incentives.

Another great reason to invest in real estate is that the market tends to fluctuate. It is at the bottom now, but it will go back up again. It always has and always will. In addition to that, the mortgage interest rates are lower than they have been in decades. Mortgage lenders are going above and beyond to try to loan money to individuals for mortgages. Even if your credit is less than perfect, you can most likely get a mortgage.

Take a look around at the homes in your area and consider investing in one as a place in which to live or to rent to others. Chances are that you pass bargains every day that will end up making you a fortune by the time you are ready to retire.

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