Investment in property
Making an investment in real estate in the current depression is a difficult decision. Much of the advice and information being given out is a downright con. The real question is when to buy investment properties.
The fact is that property prices have not reached bottom yet and a decision needs to be made as to whether an investment property is for a quick profit by flipping the home, or as a long-term investment that will provide an income. In many parts of the world, houses prices are more appealing for the buyer interested in long-term income, but not so much for the investor wishing to make a capital gain, especially in the short term.
There is no counter indications that house valuations still have a way to move, and the direction is downwards. There may be a few places, especially in the US, where prices have reached bottom, but these will tend to be in markets where there is a huge amount of inventory of repossessed property, like Nevada – massive stock of bank owned properties.
Timing is essential, when buying investment property because there are some markets that may never recover, and some markets that have already begun recovery. There are substantial differences between the most boom-fueled markets and those that saw slower, more sustainable growth during the credit boom. Those most likely to recover first are the ones that were least affected by the boom. Those most likely to recover last will be the ones where artificial inflation created massive increases in property prices over the last twenty years or so.
The governments are applying good deal of effort tore-igniting the housing bubble by Some of them are even in danger of going broke by doing so, but are desperate enough to try even if they do end up going broke. The English government for example has printed several hundred billion in new money in an effort to prevent a market correction.
Foreclosures in America are still going up, despite enormous efforts by the government and central bank. But the enormous quantity of bank owned property continues to rise, and more Americans lose their homes every day. The fact that they cannot afford them points to some serious mistakes having been made at governmental level by encouraging runaway lending to un credit worthy individuals.
Where this will end is anybody’s guess, but currently, the decision to make an investment in real estatewhich requires careful consideration before doing so. There is substantial money to be made if the correct market is chosen, and due diligence done before investing.
At the other end of the problem are those wishing to sell rental property in an extremely down market. The value of such properties is difficult to assess with the present low sales volumes, and any median price figures need to be examined closely to determine the level of sales volumes before making a decision.