Continued from page 1
In addition, cycles tend to favor ups rather than downs. It is not uncommon to see large cycles of appreciation and much smaller downward cycles. In other words, current double-digit growth we've all come to know and love in recent years will likely be followed by downturns of single digit declines. Its like taking two steps forward and one step back.
In big picture you will still be further ahead than when you started. You may see slower growth, but it will still be growth.
Real Estate is a Basic Necessity People need to live somewhere. They need a roof over their head and their children's heads. Like food and clothing we must have a home. People don't need stocks or bonds. Therefore, you can be sure that whether market is high or low in growth, whether interest rates are up or down, people will be buying, renting, leasing, and selling homes. It is as perennial as years.
This Real Estate Wave Has Been Around Awhile I don't know when you first realized we were in an up market in real estate, but it has been on a solid upward trend for at least last 3-4 years. It didn't just happen yesterday. Of course like anything else, awareness of general public is a bit latent, and dependant upon media. It has only been lately that media has really focused on it and thrust it onto front page.
The old adage "Success breeds success" is also true. The momentum will grow as other more traditional investors continue to jump on band wagon and pour their money and resources into real estate investment. It tends to create a perpetual, self-feeding market that is ideal for more seasoned investors.
Real Estate is Local and Regional It is true that even in today's real estate boom, there are areas in United States that are not enjoying high rates of return that others are experiencing. California is a fantastic place to invest, so is Arizona and a host of other places.But Rust Belt states are not as fortunate. Watch what happens to Florida home values after this horrendous hurricane season. This is because real estate is driven by primary capitalistic force of Supply and Demand.
Generally speaking, property values increase in areas where job market is strong, and where there are more people moving into than away from. Of course there are other factors to consider; including interest rates, availability of funding, climate, and governmental policies. These are all important and you must be cognizant of their impacts to your strategy.
However, it is true no that matter what rates are or how nice climate is, people will continue to migrate where there are abundant job markets and affordable housing. If you can stay just slightly ahead of that migration, you will profit immensely.
Real Estate Investing is Diverse You can invest in so many different ways, from foreclosures and fix and flips, to buy and hold and everything in between. Right now commercial space is relatively soft. It will recover no doubt, but people investing in single family homes are probably doing slightly better in returns. Vacancies are up and rents are down for commercial properties, but fortunately, forecast is for this sector to improve over next few years.
The key to successful real estate investing is to understand forces, trends, and conditions that are driving market. BE AWARE of your surroundings; Read articles and stay on top of industry news; Look in your own area at job market and forecasts. Check my website www.realestateinvestment.net for all news and information you need to help you succeed in your real estate investing career.
There is no real estate bubble, but there is a real estate wave. Like any dedicated surfer, when surf's up, get in water and catch a wave! But watch for danger, be flexible, and be smart. Invest wisely and you can prosper in any real estate market.
Michael Setz is the founder and publisher of www.realestateinvestment.net, the network created for successful real estate investors.