The decision to make an investment in houses in the current depression/recession is a difficult one. Much of the infomercials being given out is a downright con.The real question is when to invest in property.
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 home prices still have a way to alter, 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.
Acrucial aspect is the timing, 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 home prices over the last 15 years or so.
The governments are applying good quantity of effort topumping up 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 into default. The British government for example has printed several hundred billion in new money in an effort to prevent a market correction.
The amount of real estate owned houses in the USA and around the world continue to increase in quantity, so much so that there is more stock being held by the banks than is actually on the market. Although these properties are ostensibly for sale, they do not reflect a true market price. When this inventory eventually reaches the market, prices must adjust accordingly. Downwards. Supply and demand will eventually make the correction.
Investing indistressed property is a risk at the moment, which 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 real estate 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 before making a decision.
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.
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