Monday, October 29, 2007

How to make money buying Real Estate

I guess everyone wants to know the answer to this. The problem is that everyone already knows the answer.

It's very simple, "Buy low, Sell High".

That is all you need to know to make money in Real Estate.

In the past few years, many investors tried to buy homes, but they miscalculated and bought High. Now they are reluctant to Sell low, which, while understandable, is creating a large supply of homes on the market.

Home buyers that planned on living in their home (Owner occupied) who bought in the past few years, also "Bought High". They are not inclined to "Sell Low".

All of this "emotional" buying and selling creates a down market.

This, coupled with the Mortgage Industries' problems this past year, have created a stagnant market.

Rhode Island Real Estate has been in a turmoil in the past few years. After the Credit Crisis of the late 1980's and early 1990's the market started on an incredible upswing. Unless you have been living in a cave, you had to have noticed the High prices of homes. Homes were selling so fast that bidding wars were everywhere.
Of course, you knew, and so should everyone else have known, that this would not last.

Now, the market has been steadily declining. Homes bought in 2005 no longer command the price they once did and have actually dropped. Tax assessments in most cities have continued to rise and some are now assessed at over the Market Value of the home.

The market will not remain stagnant for long. It has to move. Figure it out for yourself. Which way will the Market go?

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