Many people speculate that now is the worst time to invest in real estate. There is a growing fear of a recession, and the global credit crisis means that people are tightening their belts and the cost of living has increased dramatically.
However, despite these concerns, the property remains a solid investment. People will always need a place to live for a variety of reasons, including increasing demand for immigration, divorce rates, people seeking more independence at an earlier age, students who need a place to live near their place. of study and the high cost of access On the stairs of the property. This is a great opportunity to supply real estate to meet the needs of the rental market.
Real estate investment during an economic recession is as easy as investing during a period of economic growth. Real estate prices are much lower and there are a number of cheap foreclosure properties on the market. This means that there is a real opportunity to make money in real estate, but the strategy during the recession should be seen as a long-term investment rather than relying on short-term “investment” investments.
“Flip”, which means buying a property, making renovations and selling it quickly for profit (usually in a period of 3 to 18 months) was a very easy and profitable way to make money two years ago, but this is a strategy and it is full of holes in the current market. Fewer people buy real estate today and those who buy pay much less than the sale price and may discover that they are really losing money instead of making a profit. Real estate investment requires a long-term vision (around 2 to 5 years), since any real estate property in which you invest now while prices are cheaper, you will see a constant increase in value over time in months and years coming.
So, what are the factors to look for when investing in long-term real estate?
Decide your strategy
If you want to attract the attention of young professionals, the apartments with one or two rooms will be ideal in an area close to bars and clubs, and will transfer links to make them work quickly. If your strategy is to provide homes for families, then the 3-bedroom house with garage space, near schools, parks and supermarkets, could be ideal. Defining your strategy in advance will greatly facilitate the investment process.
Decide where to invest
Is investing in a very desirable and difficult area? Nearby services should be available, such as shops, bars, schools and supermarkets. Notice if there is an increase in the supply of newly built apartments or houses in the area that are empty or require a lot of time for sale or lease.
Do your research
Learn to evaluate a property. What other properties do you sell and rent in the area that interests you? Talk to real estate agents (but don’t trust them) to get a better understanding of the real estate market in the area. The investments you are considering adding? Do your research, investigate and investigate again and do your own due diligence to make sure you are investing in the right property in the right area at the right time.
Rental of properties and actions
This is the key to long-term real estate investment. The rental of real estate can generate negative income almost instantly, although this is probably only a small amount of profits each month. Although you cannot expect to get rich in the profits of a property, five or more investment properties, all of which generate a small amount of profits each month, will soon add a comfortable income. This benefit is useful when it comes to maintenance repairs for each property or to cover periods when the property may be empty. The real fortune comes from the construction of long-term shares that can be unlocked over time to buy additional investment properties.
Remember, this is work.
You should treat your real estate investment as a business, which means you should not join the property, which is very common, especially among real estate investors for the first time! It is a mistake to get personally involved in your property. You should not think about your personal requirements, but about the requirements of future residents.
The real estate market is full of people driven by greed and fear. There were people who jumped with both feet during times of real estate boom because they wanted to get rich quickly, but they lost a lot of money and investment during the small times because they did not conduct the research and due diligence necessary to succeed in any climate. Having a long-term vision on real estate investment will ensure your success in recessions, as well as during periods of growth.