November 19th, 2008 — Investing, Long Term, Money, Personal Finance, Real Estate
Right now, if there was a market that had bad news written all over it, it would be real estate. The housing crisis has made investors jumpy, the economy appears to be tanking and home values are plummeting across the country. Would you believe that this is actually a good time to get into real estate? With the proper choices and management, this is absolutely true.
Down markets are a speculator’s dream come true and they can easily change your entire fortune. While we certainly don’t recommend sinking your life’s savings into a bunch of dead end properties this instant, this is a good time to think about investing in real estate the smart way. Never overextend yourself and always take the time to make smart investments that will pay off in the long term.
Let’s look at that statement a little more closely, especially the last two words – long term. Yes, right now, an investment in real estate is not going to do very well. In fact, it may even lose some value over the next few months. But, what goes down will go back up. Property values cannot stay low forever, and although they may not reach the insane heights they recently attained, it’s easy to make a good chunk of money with the right house.
Instead of looking at an investment in real estate in the tangible form, let’s compare it to an investment in a stock. You purchase a stock at $4 today and while it’s been steadily going up over the past few years, it’s still a pretty cheap buy. However, in eight months, the company takes off and the value of your stock increases exponentially. This would be considered a good investment. How is investing in real estate right now any different?
In fact, in some ways, you can do quite well with an investment in real estate right now. Consider the fact that foreclosures are at an all time high. What does this mean? Thousands of families need a place to live and they’re not going to be able to get a new home loan right away. This means that thousands of new renters have flooded the market and they have to find a house to rent.
Investing in real estate is always risky, but sometimes, the best returns come from taking a chance in a down market. You can easily pick up a property for pennies on the dollar, earn money from renting it out right now until the market changes and then sell it for a profit in a few years.
Remember – if you are going to jump into the real estate market, never purchase a property without first getting an inspection. Some homes that have been foreclosed on will be wrecked by the old owner or may have fallen into disrepair. Never accept anything on face value and insist on seeing the property in person. Pick properties that are solid, located in good neighborhoods and likely to go up back in value once this crisis passes.
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November 18th, 2008 — Banking, Financial Security, Income Streams, Long Term, Money, Personal Finance, Real Estate
While many are reacting to the news of bank failures and bailouts badly, there are a few people that are taking the time to assess the situation and figure out what they can do to stay on top, and keep their money safe. Panic is an ugly thing, especially when it involves money. Britain has already seen a run on their banks once this year, and many other countries are finding that their banks are on tenuous footing at best.
This creates an environment that is very unstable and as a result, the very real prospect of earning everything you worked so hard is now possible. The biggest mistake that people make when the economy goes through corrections is overreacting. Granted, no one wants to lose all their money in the stock market, and you would find few people indeed that aren’t at least somewhat concerned over the direction the economy is going.
While some are bleating “Great Depression” and others are scoffing, this is a good time to start developing some strategies that will keep your money safe. While there are no guarantees that you can protect every dime, there are ways that you can keep your money safe, and even increasing, in times of economic hardship.
One of the best ways to secure more income in these times is to find ways to make the situation work for you. As an example, the car market is struggling right now, people can’t pay their interest payments and housing is in the tank. However, a smart investor will look at this issue and see ways that they can profit from it.
Thanks to the falling value of homes, there is a rush to pick them up cheaply to flip at a later date. Whether you decide to use the property as a rental to keep regular income coming in, or you want to flip it quickly, real estate has a lot to offer at this time, even though everything seems gloomy. All hope is not lost, and while outright speculation is not a good thing, taking stock of the market and seeing how you can turn your finances around is a good thing.
While you should not invest if you have no experience, at least not without the help of a broker, it helps to broaden your view of the situation and see where you can profit. Reading the financial news on a daily basis is something proactive you can do and it can help you spot trends right as they are occurring. By becoming an informed consumer and taking the time to learn the ropes, you’ll be in a much better position than those who have not paid attention and frittered away their money.
If you are truly worried about your money, consider speaking with a financial analyst, or an investment broker that can help you develop long term strategies that will keep your money safe, and increase your income, no matter what happens in the world.
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November 17th, 2008 — Money, Personal Finance, holiday shopping
It is looking like the upcoming holiday season will be gloomy for many families, given the current state of the economy and continued bad news on many financial fronts. While this may not be a time to go all out with gifts, there are holiday shopping techniques that you can use to save money without scrimping too much. Thankfully, stores are lowering prices, which will make it easier to get your gifts and still have money left over.
If you are someone that maxes out a credit card and goes whole hog for the holidays, this is the perfect year to rethink that strategy. Interest rates on credit cards are quite high and this type of spending will only hurt you over the long term. While it is wonderful to see the looks of joy on the faces of your recipients, this should not be enough to warrant loads of debt.
Look for the Best Deals
The first technique you can employ is simply smart shopping. Take a look at the different ads and develop a strategy for finding the lowest prices. As mentioned previously, stores are running numerous sales at the moment and this is a good time to stock up on holiday gifts. While many people prefer to wait for those last minute sales, this year, it may be smarter to take advantage of the low prices right now.
Try Shopping Online
This is also a good time to think about doing more of your shopping online. As gas prices go up, traveling to numerous stores has become prohibitive for many people. Having the ability to shop tax-free in many cases, and saving gas money, has given online stores quite a boost. It is also quite easy to find money saving coupons from online retailers and many are also running special shipping deals to help their customers save money.
Think About Handmade Gifts
If you are in a bad financial spot this year, you may want to think about making gifts instead of buying them. Whether you have the ability to sew, make toys, or do anything handy, these gifts will show just how much you care without breaking your bank account. While you may not be able to make the latest toy or Wii system, you can make heartfelt gifts that will be appreciated.
Putting it all Together
No one wants to think about being frugal during the holidays, but this year, it may not be a bad idea, especially if you are struggling financially. Try to think of new ways that your family can celebrate the holidays on a budget and use this as an opportunity to teach children about the real meaning of the holidays, instead of the commercial interpretation. They may be a little resistant at first, but this is a good lesson to learn and may help teach them more about the value of a dollar.
With a little creative thinking and planning ahead, you can make sure that this holiday season is even better than the last.
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November 3rd, 2008 — Money, Personal Finance, Real Estate
The housing market has many people concerned right now and one of the most popular questions is whether or not this is a good time to buy a home. Unfortunately, there is no clear cut answer to this question, and each individual’s financial state will determine the answer. However, there are a few guidelines you can follow.
First Time Buyers
Right now, many experts are recommending that if you have great credit this is a good time to get a house, thanks in a large part to falling values and lowered prices. However, keep in mind that bank approvals will not be easy to get and appraisal values may drop even during the process. For those that are not quite ready to make that leap, or for those that cannot get an approval right now, renting is the best option, especially if you can save up enough money to increase your overall down payment.
Those Facing Foreclosure
If you are among the thousands that are facing foreclosure right now, and you are considering selling your home to buy another, the answer is definitely uncertain. The chances of getting a new home loan are slim to none, and as such, for many in this position, renting may be the only answer. However, to further complicate matters, landlords are increasingly relying on credit scores to determine whether or not they want to rent a property.
If your credit has already been affected by a foreclosure, renting may also be nearly impossible. It is best to move quickly in this situation, before your credit will be dragged down even further.
Existing Homeowners
If you are looking to sell your home in this down market, it may be best to hold tight and wait for the housing market to improve. The chances of getting the full value of your home are small, and buyers are finding it difficult to get a home loan right now. If you are not at risk for foreclosure, this is a good time to start making improvements to your home that will increase its overall value.
For those desperate to sell in order to get out from under higher interest rates, a short sale may be necessary. If you are comfortable losing equity in your home and would rather sell than face foreclosure, this may be your only option. It is best to work with a realtor in this situation since they will have the resources available to help you locate buyers in less time.
The rental market is booming throughout the country and in many larger cities, it is getting more difficult to find a property. If you think you will be in the rental market soon, it is best to start looking right away in order to secure your property. For those that have truly no options at this time, it may be necessary to move in with family members or get assistance until you can turn your finances around.
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