Think now isn’t a good time to get into the real estate game? Think again. We’re seeing a fusion of factors that are creating once-in-a-lifetime opportunities for potential investors.
1. The “irrational” markets are over.
The wild appreciation in real estate values over the 10-year period that peaked in 2006 is history. There’s no argument from anyone on that point. Combine that with the failure of huge banks and home lenders, and you have a very tight money market restricting any short-term price growth.
2. Prices are flat or down just about everywhere.
This may sound ominous, but it’s far from negative. Never before have homes in great neighborhoods been available at such depressed prices. There are foreclosure bargains in every price range. And suggested government programs may subsidize the liquidation of these foreclosure properties at even lower prices. It’s a true buyer’s market.
3. Those who lost their homes must rent.
Rental demand is increasing, and should do so for years. Those who lost their homes to foreclosure must rebuild their credit. And before they’ll be able to purchase again, lenders will require them to make larger down payments and meet stricter requirements. So they’ll be renting for a long time to come.
Remember, a large percentage of those foreclosures happened because people made poor choices when they got their mortgages – not because of financial misfortune. Many foreclosure victims are still employed and can pay market rental rates, and they are likely going to rent something similar to their previous home.
4. Government initiatives are depressing interest rates and stimulating home sales.
Though requirements have tightened, those with good credit and a down payment can get mortgage rates lower than at any time in the last 20 years. And since the government has a strong stake in reviving the housing market, more help is on the way.
Even if you live and invest in an area where prices have merely stalled or grown by a tiny margin, the opportunity is the same. When the hardest-hit areas (the Southeast, the West Coast, and the Southwest) are just turning around, these less volatile areas will already be showing price appreciation.
From a purely economic supply/demand viewpoint, this is an amazing window in time for real estate investors. We have more demand for rentals, lower prices to purchase properties, lower rates to finance our purchases, and a government that’s using every avenue it can to stimulate the housing industry.
To take advantage of this unprecedented opportunity, you need to be poised to jump as soon as a good investment arises.
Investing in real estate, whether you’re new to the business or an old pro, doesn’t require a whole lot of skills. But it does require knowledge. The more knowledge you have, the better able you’ll be to spot the best deals.
One of the sayings I live by is “Knowledge plus action equals results.” To be a successful real estate investor, you need to be constantly adding to your knowledge base – especially when it comes to:
- Current national real estate sales and price trends
- Local trends that influence where people want to live
- Local employment, industrial, and job creation activities
- Neighborhood dynamics (whether the population is growing or declining)
- Resources for everything from loans to renovation
Knowledge comes from many sources and directions. Make sure you get your information from someone who is active in the current market – not someone stuck in the pre-bubble days.
Of course, as Robert Ringer and Michael Masterson have said many times, knowledge doesn’t do you a lick of good unless you get off your butt and do something with it. This means taking action – turning over every rock, investigating every real estate investment that sounds good, and moving on the best ones.[Ed. Note: Dean Graziosi is a full-time investor who began his investing career over 20 years ago – during the last major recession! He’s made millions of dollars with his real estate investments, and currently has more than 30 deals in the works. Discover his bestselling blueprint for making $10,000 in 30 days right here.
For more cutting-edge advice on how you can make money in real estate, check out ETR’s upcoming Wealth Building Summit. Get all the details now.]