Property Investments in the Current Economic Climate |
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By: David Olsen Posted: 2010-01-16 07:00:45 |
| During times of recession, investors get more troubled about their finances. This may be partly true because they do not even have the necessary funds to buy a property to invest in. If this is the way they think, they are guessing that other property buyers share the same thought. If this is the case, then they would be buying a property that nobody will buy. People are afraid to make property investments in the current economic climate because of the assumed difficulty of liquidating the asset. But is this the true picture of investing in real estate during a recession?Flipping-Turned-ForeclosuresInvestors who make money flipping homes usually seek foreclosures. These cheaply bought investments can be sold at much higher prices given that the properties can be restored to brand-new state. That is what should happen anyway. When there is a recession, however, the other way around happens. Investors may flip homes that will just end up as foreclosures. This is because flipping makes money out of being able to sell property right after it has been fixed or at least prepared. When there is a recession, the property can remain on the market for a long time without anybody buying it.Should you invest anyway?The current situation may seem bleak, at least in the case of flipping property. However, you can still invest in property these days. Property investments in the current economic climate need not be surefire failures. There are some advantages to investing in property in such an economic state. Some of them are:- Low Interest Rates: You can buy property for lower interest rates during a recession. When the economy is back to normal, you can sell the property for a higher price. There will be no flipping here, however, unless the economy rapidly improves and you see a chance to resell your property.- Lenient Lenders: Because some investors are frightened of making big moves during a recession, lenders do not have many requests for loans. So, they seek to make money during these times by offering low interest rates. Getting your loan approved is also much easier in such an economic state.- Personal Use: You can buy a property for less during a recession. If you were previously renting a home, this could be a good move for you. You do not have to continue paying rent for property that will not even end up yours. When renting, you are helping somebody else make money out of their investment while you are going to end up with nothing after your contract has expired. The home you buy for personal use during the recession can be sold for a higher price when the economy is better.- Rent Out: If you have extra property that is not getting sold during the recession, you can have it rented out. Some people who cannot afford to buy a home will be looking to find a place to rent.Property investments in the current economic climate may not be robust in some aspects of real estate. For example, the flipping strategy may not work well. However, there are other opportunities to earn money.Final ThoughtsForex investing has become one of the top work-at-home investment strategies. While all investments have risks associated with them Forex when done properly can be lucrative. At Learn To Trade Forex You will learn all about the crucial Forex Investment Strategies. |
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