Why You Shouldn't Care About Real Estate Prices
By Sean Wheller
There are even more predictions about residential real estate going down for another 2 years or more. Can this be true?
As with any prediction, it can be true as much as it can be wrong. But, in essence for real estate investors that have purchased correctly - this does not matter at all. Never did and probably never will.
Sure any investor can buy one or two wrong properties in their portfolio that don't make much money, but one "sour lemon" has never been the "end of days" for any real estate investor.
Unless, of course there is the "but" again, and the "unless" again; those are the only properties that the investor holds. Then this could be a big problem. So, why in essence it doesn't matter where the market goes or how much real estate costs?
Think about it! If the market is going further down, investors will have more tenants than ever and rentals will catch up even faster form the last 4 year lag. Plus every investor will have more breathing space to buy more at cheaper prices faster get to financial freedom (actually if done right, get very rich from this down turn).
If the market goes up, then of course the capital appreciation may afford them re-financing again to buy more property when the right deal comes along (not for retail debt).
So a correct purchase should still be either cash positive or close enough not to make a big difference in the bottom line. Hence, price is not the issue - return on investment is the real issue.
Therefore any correct purchase of a property in terms of price, location and rental; the market and where it goes should not matter, you make money on the down and you make money on the up.
Similar to the stock market. If everything falls, you "short" the stock, if everything goes up you are "long" on the stock.
The point is any correct entry to any investment will be profitable in any case anyway. So, it does not matter if the prices are going up or down.
Now if one has purchased incorrectly, then one might have a serious problem and that is where we will see more foreclosures, and more investors that saved some cash buying property dirt cheap and actually paying the 5% or 10% or even 30% deposit. That deposit won't matter anyway for them, because at cheap prices the deposits will be cheap also and later on they will re-finance no doubt about it.
The only questions for every investor remains: did you buy correctly? If yes, you have nothing to worry about anyway, it is a win-win situation. If not, you may consider learning about real estate investing, so that you can buy your next property investment correctly and make sure no matter what happens you are in a win-win situation.
Think about it. Would you rather never get to your financial freedom? Worry about the markets? Or learn to invest in real estate wisely?
Real estate and property is still the safest investment - ONLY IF PURCHASED CORRECTLY - because everyone will always need to live somewhere, if there is a market crash or a market boom. So you can always either rent it out, or sell it. Does not matter either way you have a win-win situation.
About the author
Sean Wheller is a real estate agent, investor and the founder of the largest online property investing education website in South Africa that specializes in real estate training, and real estate investing courses and seminars. from http://www.FreeArticlesAndContent.com
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