A Real Estate Investing Strategy that Works in ANY Market
Published on: Friday, December 18th, 2015
Real Estate Investing Strategy that Works in ANY Market
One thing that the last several years has taught us is that financial markets can go up and they can go down. The real estate market is no different. When markets go up, everyone is happy and even bad investments can turn out okay. When markets go down, investors who used the wrong real estate investing strategy at the wrong time can get wiped out. Down times separate the good real estate investors from the bad or just lucky investors.
Have you ever turned on the television on a Saturday morning to one of those home flipping shows and thought to yourself, “That guy made every mistake in the book and still made money. I can do better than that.” Next, you ran out to purchase a home to flip and lost a small fortune when your home sat on the market for 6 months or more. If that was you, don’t worry, you are not alone. It happened to millions of Americans who got caught when the economy turned from a seller’s to a buyer’s market.
You probably thought to yourself, “What did I do wrong?” I know I have. The problem wasn’t that you didn’t buy and fix up the property properly, you technically did everything right. The problem started before you bought the property and you probably didn’t even know it. The problem was that you were using a strategy that works best when the market goes up, and it changed on you.
Back when we built single family homes, we ran into the same problem. If the economy was strong when we were ready to sell, we made money. But, when the market started to slow our profits were eaten up by carrying costs as homes took longer to sell. Profits were also eaten up by price reductions needed to get the home sold. During construction the economy changed from a seller’s to a buyer’s market and our investing strategies had to change with it.
No longer can you only have investment strategies that just work when the market appreciates. You must have an investment strategy that works whether the market goes up or down if you want to be a successful real estate investor and be around for the long-term.
The perfect strategy for real estate investing in any market does the following:
- Provides income on a monthly basis as well as when you sell
- Allows you to hold the investment indefinitely regardless of economic conditions
- Insulates your investment property value in economic downturns
- Allows you to still take advantage of appreciation when the market increases