Recently, I attended a real estate investors club in LA and the speaker strongly suggested the declining markets will last til 2011 and encouraged investors to hold off buying and wait til then.
I have no doubt that this declining market is going to last for a while, however, this means all real estate investors should stock up as many properties as they can during this time! To wait til 2011, not only you have a late start, by that time, you will be competing with WAY too many investors who have gained their experience within these couple of years. It’s like history repeats itself during the housing boom, as time goes on and as the booming news wide spread…more and more people will be competing with you.
However, not to say that you should stock up just ANY properties onto your real estate portfolio. Choosing a real estate is an education, is a knowledge and also require number crunching. One of the reasons for this downturn is because too many speculative homeowners and investors hope to buy properties that will appreciate and flip them later to other buyers. WRONG strategy! Although real estate is a safe investment vehicle, but you can still ruin your life by doing it the wrong way! Just like a car in general is safe, but it can kill you or someone else with a bad driver in it. You need to take a lesson from a trusted professional, put on your seat belt, learn how to drive a car the correct way, look around your side view mirrors and double check with your eyes before you change lane! Same in the real estate, although many became millionaires through real estate, many also became BROKE because of real estate. Before you step into the real estate investing world, learn from an experienced and trusted investor, include addendum clauses to protect yourself, do your own due diligence, double checking your numbers and make sure it’s safe before you dive into real estate investing.
As for timing, when should you buy? Should we wait til 2011 to buy? My personal opinion depends on your strategy and locations. I would highly encourage anyone to buy if it’s already a discounted property, is in a high foreclosure rate city, and you are able to get positive cash flow renting it out. If the city has stable population and job growth, with the high foreclosure rate would only mean higher demand for rental properties. Hold on to it until the market turn around and maybe your renters will save up enough money, improve their credits and purchase your home when the market is ready for them! Many investors have already stocking up these rental properties and it will only get more and more competitive in the future. Different cities has different rate of declining, some sooner than the others. So don’t sit there and wait, opportunities to own an investment property is everywhere! Get a head start!
–Helen Chong 2009, www.HCRealtor.com