Due to fears of a double dip recession, lack of “hot markets” and plummeting property values, one of USA Today’s financial experts has stated that “the days of flipping real estate, commercial or otherwise, are pretty much over”[1]. Tom Casey, a certified financial planner at Casey Thomas & Associates, believes that now is the time to rent property, not try to sell it quickly to turn a profit.
Prices went so high between 1999 and 2006 that the housing market simply cannot make a simple recovery when it comes to fast real estate transactions. As a result, more property owners are tending to buy and hold, renting out properties to the many people who no longer own their homes. Given that more economists are starting to predict another dip in prices over the next 18 months – some estimate as much as a 5% drop – flipping could become increasingly difficult.
While some investors are still flipping successfully, others are looking to buy low and hold or are holding out for new low prices forecast for the near future. But does it really make sense to wait on an investment in a rental when prices are so low now and you can get deals that will enable you to bank serious profits each month when rent comes due? How are you reading the next 18 months in real estate? Are you striking now while the iron is hot, or waiting on tomorrow’s new lows?
Thank you for reading! Your comments and questions are welcomed below.
[1] http://www.usatoday.com/money/economy/housing/2010-08-14-cnbc-real-estate-investing_N.htm
I have written about this. So much depends on Nov 2 elections. On the present course of this administration and with the knowledge of the “true agenda” of this crew, I would like to borrow the line that lives on in infamy, “DANGER WILL ROBINSON.” If you are too young to remember Lost In Space on TV, that will make no sense to you and I ask you to simply go along with it. For two years I have predicted what is coming, not because I am a graduate of “Hawvid” or an Einstein, but because I am fed by amazingly accurate gut feelings of what has already come and what is yet to come. You mention a prediction of an expected fall of 5%. That’s not even close. Flippers can make it but the profits will be way down which brings to mind then, is it even worth the aggravation. Buying right and “knowing” your rehab costs is critical. Always do your due diligence – always. Wholesaling is a safe bet. So is the buy and hold strategy… unless my worst case scenario comes to pass which is “depression style-unemployment” where keeping your rentals filled will become the challenge of the day. Living like The Walton’s will become commonplace. Trust me.
Remember this: what we hear from the media is radically different than what they are actually doing in the White House. You rarely hear anything more than what they “want” you to know and think. The only thing that will change the course is if they are devastated and derailed with November elections. Red and Blue must stand together against … the others.
The real danger on the immediate horizon is the plans of this administration to force through as much as they can between the election and the swearing in of the new crop! Pelosi, Reid and Obama have already said as much.
To quote Pelosi, “Have to pass the bill to find out what is in the bill.”
This is the time of the evil black robot coming into the story, check Lost In Space, before anyone has a heart attack, for all of us from Will Robinson’s era we know it did not go well for most of the rest of the episode!
There is lots of talk about hitting the low in Real Estate, has been for two years now! The newest new low period has moved from 2010 last half of the year, to 2015 maybe!?
The idea of renting is good if you can find renters. Finding renters is increasingly hard in Arizona and other places I keep track of. People need to have a source of income to rent, no income, no renters. We do not have lessening unemployment and the government can only put out their new extended dole for so long. Then what, are they going to ramp up welfare again, like Carter did? Who are they borrowing that money from, China is having its own problems and lending to us is becoming a lost cause and they know it.
Have whatever strategy you are going to use be rock solid! Many of even recent purchasers of real estate are going to find themselves underwater soon, some already have. Several of the younger purchasers I know woke up a couple months after buying to realize they are already underwater!
Not happy, actually kind of scared because they were assured it was a great deal!
Where have I heard that before?
After going full speed for the last 20 years as a real estate investor I feel like I am semi-retired. The reason being that instead of carrying 4-7 houses a month on my inventory I have been carrying 1-3 houses a month here in San Antonio for the last two years. I filp ,carry paper, rent, & rehab & have been blessed with success, but now there is so much uncertainty that low & slow has become the motto. There were times when we only took a few days off on Christmas because everthing we put on the market sold within a week ! We really did”t ever have any slow periods until more & more people started crying that “the sky was falling” ! For me , I took for granted that every property would sell no matter what time of the year it was. Now, I couldn”t tell you tell whats going to happen next week !!