20 Dec 07 
5 Things You Can Do To Make Money in Real Estate
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1. Buy and HOLD – Hold onto your property and over the years it will lose value, gain value, lose value and gain value again. The real estate market is cyclical and traditionally sees a 5-6% average annual increase in value. How’s that for an investment you are making small monthly payments on?
2. Location, Location, Location – Real Estate is local and then even more local. Areas within cities gain more value than other areas within the same city. Research your way to a great real estate investment and refer to surefire tactic #1 after you do purchase a new home or real estate property.
3. Buy When You Are Ready – Being ready doesn’t mean that you want or even need a new home. Buy a home when your credit is good, there are low interest rates and the market is a buyer’s market (like right now). Buy a home when you plan on holding onto the property and try your best to put down a considerable amount of money. Higher down payments coupled with a good credit rating scream lower interest rates and payments.
4. Rent Your Property out and Break Even or Create a Little Cash Flow - Refer to surefire tactic #2 (location) and #3 (buy when you are ready) and rent your low monthly payment investment to a good family with good credit history. Then you will need to refer back to surefire tactic #1 and HOLD. Keep in mind that in some markets today, it is very hard to purchase a new home and breakeven, or to cash flow the property without a large down payment.
5. Buy a Foreclosure or Short Sale Home – A good way to make a little extra cash and boost your equity is to profit off someone else’s misfortune. It’s unfortunate that people lose or cannot afford their homes but you will do yourself a favor by buying a home the bank doesn’t want and the homeowner unfortunately can’t afford. Read over surefire tactic #3 (be ready), #2 (Location), #1 (HOLD) and #4 (if renting is your goal) once again and be sure to research and get professional advice.
Surefire tactic tip #1 - Don’t Listen to The Media! – The media isn’t always right and doesn’t always report what you need to hear. I’m not saying the media lies, I’m just stating that sometimes they paint broad strokes and don’t always consider surefire tactic #2 (Location) and the rest of the surefire tactics to make money in real estate. It’s difficult to analyze data and report on every location throughout the United States so listen to your local experts and let them tell you where and when to buy a new home. You never know, your real estate agent might actually have your best interest in mind!
Surefire tactic tip #2 – Get Off the Fence! - If you are ready to buy a new home, can find a great deal, have researched location and plan on holding – buy a home now. It defies all logic to think that demand will increase or supply will decrease by waiting to buy a new home. If no one buys a new home they won’t be sold. Do us all a favor and buy a new home if it’s right for you.
Surefire tactic tip #3 – Don’t Add to Our Current Dilemma – If you can’t afford a new home and don’t want to ask or do a little research to ensure that you buy a new home that works for you-you should rent. Rent a home or condo until you are ready to buy; when you do buy – don’t get into a loan program that will put you in a bad situation after the interest rate increases as they told you it would.
Tags: federal reserve board, Homes for Sale, interest rates, new homes, rate increases, real estate investment
Reader's Comments
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You are so right about the media. They may not lie, but they distort and sensationalize. They talk about the national real estate crisis and try to apply it to local markets like Austin and other relatively healthy markets where it just doesn’t apply.
I always recommend to customers that want to invest in real estate - that no matter what the market is (buyers or sellers) - be sure you can afford to hold on to a property should the market change. Don’t become an investor just because it is fashionable.
Repeat sure fire tip #1 over and over and over and over again. The media is killing real estate.
Most people are too scared to do anything. Though I am starting to see investors starting to move in for the kill. This can only be good news…meaning that Mr. Regular Joe is not too far down the beaten path.
@Sam - I couldn’t agree more.
@Lipply Home Sales - that’s good advice. It seems like everyone became an investor 2 years ago.
@Chantal - Definitely a good sign when investors get back into real estate. Let’s hope this trend continues.