Spotting Good Long-term Real Estate Investments
As the economy continues to be unpredictable and many experts aggressively disagree
on how the state of the real estate market will trend in 2010 and beyond, there is one thing that everyone can agree on:Long-term real estate investing is the only guarantee.
No one disputes that at some point the real estate slump will be over, and when it is, real estate will still be the one commodity that no one can make more of, which means that it will increase in value. As a result, this is a great time to buy because you can purchase properties for literal pennies on the dollar.
However, before you get too excited, I know a lot of really good investors losing their shirts right now because they bought for pennies on the dollar in places where those pennies are now totaling thousands of dollars more than the properties are worth. So if you are going to buy for the long-term, you have to be in it for real. You have to know that you have the money to maintain the property and keep that bank loan or private loan current even when it does not appear that things will improve. A warning: if you are thinking that you will re-finance at some point to make the property more affordable (or if you take out a loan for only a few years) then you should think very carefully before investing in a long-term investment that you are not sure will be worth more in a couple years than it is now.
However, if you want to invest in real estate investors for the serious long term that is, ten years or longer, and usually 20 to 30 then this can be a great time to buy. But look closely at some local trends in the market and in the local economy in order to make a good prediction about the value of your long term investment.
As always, one of the best long-term investments when it comes to real estate are still foreclosure properties, and you can get them dirt-cheap (and fairly securely) by working with buyers. However, if possible, look for foreclosures that are owned by the people selling them, and that have decent loan terms so that you can possibly just buy them subject-to, avoiding the need for a new loan in your name all together. I have some colleagues who used to renovate foreclosure homes and resell, but there are so many good properties out there right now that they are currently just focused on solid properties with loans of between 5 and 8 percent that they can get for no money down in exchange for taking over the mortgage. While these homes do not have a lot of equity in them right now, they are in safe, solid neighborhoods that have not changed when it comes to crime rate or basic upkeep despite the current economy and real estate shifts, so these investors believe that these properties are the safest bet for long-term real estate investing.
Another option is commercial real estate. These long-term investments can actually bring in some profit rather than just being an investment fairly early in their life if you can lease out the property. However, you must select live properties if you hope to do this, and you will need to be prepared to view the properties as an investment that may not start generating wealth immediately.
Peter Vekselman has been successfully investing in real estate since 1996.
He has completed over 1200 real estate deals, owned a construction company, been a private lender, and owned a property management company. Peter currently works with clients all over the US helping them achieve riches in real estate investing. For more information please visit www.CoachingByPeter.com
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