Three Ways to Get Involved in Real Estate During a Downturn
When people hear about a downturn in the real estate world, they just sigh. No one wants to hear that their homes are worth less today than they were yesterday. No one wants to live in a world where house prices keep shrinking and everyone seems to have trouble selling their home.
Everyone except real estate investors, that is.
A real estate investor who really knows his stuff can get involved in – and turn a profit from – property even when downturns happen. While many people fret about how hard it is to sell, the buyers of the world are pleased because it means they can hunt for bargain after bargain. Of course, waiting for a downturn to happen isn’t a great strategy – it just simply means you’ll have to change your strategies to suit the market.
If you want to get involved in investing with sound strategies during a downturn, here are a few tips.
1. Try less-conventional transactions like a Subject To transaction. In a Subject To transaction, you can take on the expenses of a mortgage with a limited up-front investment, taking advantage of the “seller’s market” by making sure you can get a piece of real estate for a relatively cheap amount of money. Upfront investment? There isn’t much.
2. Remember that sellers are looking to sell – often at reduced prices. If you have the money to hold a piece of real estate long term, you can buy someone’s home at a reduced price thanks to the “seller’s market” and wait until even a small upturn to increase the property value. This can be risky if you need to take on some expense risk in the short-term, but if you know how to create a good situation or can even rent a piece of property out, you’re looking at long-term success.
3. Building real estate can often be cheap because of the reduced activity – if you’re looking to expand or develop a piece of property, you might be able to find quotes that are less than they have been in years past.
Remember that you don’t have to be subject to any one particular swing in the market and you’ll be just fine. Adopt a mentality that says “I don’t have to succumb to anyone’s particular feelings” and you learn what it takes to be a confident real estate investor who’s working off of his own attitude – not everyone else’s.