Real Estate Investing
With the world in a mild recession, and the U.S. suffering a real estate market downturn, a smart investor can still make money in a buyers market by carefully monitoring certain properties that are either in foreclosure or close to foreclosure with mortgages below market value at the time.
Real estate is one investment that is needed by everyone, because everyone needs a place to live and even if you cannot afford to purchase a home of your own, you will have to rent one.
In California, where foreclosures are fairly high, smart investors are buying properties that are going into foreclosure soon, and then collecting rent from the people who lived there, or by advertising it for rent or lease.
Many people are letting their second homes go back to the lender due to the economy and are willing to give up a vacation home fairly cheap, especially if their employment is gone.
The collapse of the residential real estate economy triggers a domino effect and the dominos are already starting to fall down in almost every city across the United States, big cities and little cities.
If you continue bidding on foreclosures, you will eventually get a property and you can then fix it up and rent it out to a tenant, and you can hold onto the property until the residential real estate market turns around.
If you are renting a home now, you need to realize that you are paying a mortgage for someone else, when you could be paying yourself that money as well as taking advantage of tax incentives that are available to homeowners if you owned the home instead of renting it.
Make sure you know what financing the foreclosed house has on it before making a bid to buy it at an auction, because if you don’t, you might buy something you wish you hadn’t.
Real estate agents have a list of homes in foreclosure and these are owned by banks and lenders and this information is also of public record so if you are working with a real estate agent, they should be able to show you the homes in your area that are in foreclosure.
If they have gone into foreclosure because of some unforeseen circumstance that will be alleviated, such as someone losing their job, you can make them an offer to rent to buy, which means that a portion of their rent can be used as a down payment if they want to buy their home back when things get better.
Either way, you make a solid investment and have renters who will most likely take care of the home.
