Investing in properties

The decision to get involved in buying investment real estate in the current financial storm is a difficult one. Much of the Info being given out is not true.The real question is when to invest in property.

Most homes 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, prices are more appealing for the buyer interested in long-term income, but not so much for the real estate investor wishing to make a capital gain, especially in the short term.

Many people agree think homevalues still have a way to correct, and the direction is down. 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 stock in real estate owned property. Florida would be a good example with huge amounts of bank owned property.

Getting the timing correct is important when making an investment in 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 houseprices over the last 13 years or so.

A great deal of effort is being put into re-inflating the housing bubble by the governments. 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 into default. The British government for example has printed several hundred billion in new money in an effort to prevent a market correction.

Rising numbers of distressed properties are still dragging down the market in the USA, and the governmental intervention has done little to stop the flow of property into the banks. There are massive quantities of REO properties in the system that has not yet been placed on the market. This approach of allowing the banks to hold so much property back from the market place must surely backfire, and there must come a time when this stock is released.

Where this will end is anybody's guess, but currently, deciding to begin investing in houseswhich 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 raise financing in an extremely down market. The banks are just not lending and arranging investment property loans is extremely difficult without a strong track record. 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.