Investing in Boom and Bust Markets

Where Should You Put Your Money in Different Market Cycles?

It’s important to pay attention to the market you want to invest in. That’s why when you’re investing in real estate you need to know the best time to buy and sell.

Is the market right now the best time to invest in real estate, or should you wait and perhaps invest elsewhere?

Market Trends

In 2008, the real estate markets fell pretty heavily. You could sell and get some of your money back, but the best choice was to leave it alone and hope the market eventually climbed once again.

The markets recover slightly in 2009, but fall again by 2011. However, the rental market is much stronger. Now, in 2013, real estate is still undervalued by about 6-7% in most markets. However, inventory is now tight, and it’s once again hard to find a good deal on rental properties.

Invest in Real Estate?

If it’s so hard to find a good deal on rental properties, what does that say about investing in real estate?

Well, buying rental real estate might be difficult, but getting tenants to sign a residential lease isn’t hard at all. In fact, people are lining up to rent houses and apartments right now and there are few to be had.

Earning a Strong Return on Your MoneyIf you want to invest in real estate, or you already are investing, how will you earn a strong return on your money?

Vacancies are the biggest cost for landlords, so the best way is to avoid losing money is to watch out for neighborhoods with high vacancy rates. Also, you should always maximize tax advantages, and never buy a rental property that doesn’t instantly offer strong cash flow.

More People Are Renting

Though more people are starting to buy houses now that the market is recovering and foreclosure rates are decreasing, many people are choosing to save money and rent instead.

Many apartment buildings have lengthy waiting lists and are screening tenants as quickly as the units become available. However, many families are now looking to rent single-family homes and are willing to pay a bit more for the freedom and space of a full house.

Apartments or Single-Family Homes?

Single-Family homes are rapidly becoming the most desirable renting option for many families.

Apartment complexes are filling up and are not always the ideal places to raise a growing family.

Improving Tenant Retention If you already own a rental house, there are ways to keep your tenants rooted down so that you don’t lose money by having an empty unit.

Communicate regularly, but only about important matters. Respect your tenant’s privacy and handle disputes calmly and professionally. Also, if you have respectful and well behaved tenants, think about letting them have a little leeway every now and then if they need it.

Relatively Cheap Upgrades to Improve Property Value

If you need to spruce up your rental home to make it more desirable to tenants, try some relatively inexpensive upgrades like a gas fireplace or a second-hand hot tub (all hot tubs are pre-owned to tenants).

Other light upgrades might include touches like bamboo flooring, landscaping, or even smartphone-controlled keyless locks.

Act Now for the Best Profits Keep an eye out for good deals on rental properties, and wait for a property that will create cash flow immediately when leased. Many real estate markets are still undervalued, but inventory is tight in some markets.

If you can’t find any good deals, then just bide your time. Pay down debts and save 10-25% from each paycheck so that when the chance comes, you’re ready!