Real Estate Information

5 Secrets for Surviving a Real Estate Market Downturn


History repeatedly serves to show us that the real estate market is cyclical. It has boom times and stagnant times, occasionally it suffers a crash but real estate never becomes worthless, therefore if the experts are right and we're about to suffer a slow to stagnant period in the real estate market, all is not lost!

There are 5 fundamental secrets that real estate investors like to keep close to their chest and they are the secrets that enable them to survive and even profit during a bear market.

This article blows the lid off the secret world of the professional real estate investor!

1) Aligning For Profit in a Bear Market

When professional property investors believe the market is entering a downward phase i.e., changing from Bull to Bear - they will change their investment strategies accordingly. One method that tough investors apply is to buy up property in the best areas that they can afford once a market is slumping already. Professional real estate investors know that the best areas for property always boom again very early on in the next property cycle.

By working in this way they can then leverage their investment by selling their property early on in the boom cycle and buying elsewhere and always remaining one step ahead of less professional investors or average home owners.

Up and coming areas will eventually peak as well of course as they are swept along on the tide of the boom, but they will not peak first and investors in these areas will have to wait longer to see their profits.

Professional investors will likely enter these areas just before they peak and sell up just before the heat goes out of the market enabling them to again buy up what they can afford in the best areas thus positioning themselves ready for the next upward trend. And so it continues!

2) Slow Down Your Speculating

You may already have decided that the time is no longer right to be over extending yourself and you may have cut back on your property purchases, but remember that making any home improvement or taking on any renovation projects during a downward period of the property market is also considered to be speculating. Don't just assume that capital appreciation from your property will justify home related expenditure right now?in a bear market it won't.

3) Never Forget The Supply and Demand Theory

Property prices don't go up infinitely, if you examine the ebb and flow of the market in the US over the past decades for example, you will see that stand alone investment in real estate would've returned you gains of just over 1 percentage point above inflation! There comes a point in every market cycle when the market runs out of investors willing to buy up at the top prices and there comes a point when first time buyers are frozen out of the market. As demand dries up, over supply brings down prices and this stops the entire market in its tracks. If you remember this fundamental fact and examine the movement of the market closely and carefully you will be able to see when supply is about to outstrip demand, you will be able to watch first time buyers reigniting the market, you will understand when the time is right to sell and when the time is right to buy.

4) Balance Real Estate Exposure

You may assume that your only exposure to the property market is what you physically hold in the way of real estate assets - but don't forget all your paper investments as well. Do you have money invested in REITs, do you have funds that invest in commercial property as part of the underlying portfolio, what about your retirement fund, which market sectors are the find managers investing in on your behalf right now? Don't assume that fund managers will make the right decisions at the right time on your behalf, you might be able to see the heat going out of the market quicker than they can react. If this happens you have to be prepared to rebalance your entire portfolio and move your exposure away from real estate if you believe the market is about to dip.

5) Protect Your Equity

There is nothing more valuable than the equity you own in your own home. Do not put that at risk. It is very tempting in a boom market to re-mortgage yourself back up to the new greater value of your home, but in so doing you expose yourself, your family, your home and your future to unnecessary levels of risk. Secure the roof over your own head first and foremost, and only then proceed into the greater real estate market with care! Do not be tempted to secure any extra loans or mortgages on your family home. Professional and wise real estate investors worth their salt will always secure their own position first and foremost.

Rhiannon Williamson writes for real estate investors, international investors and expatriates via her site http://www.shelteroffshore.com/ If you want to discover the latest investment property hotspots, learn about investing offshore or become an expatriate and living and working abroad, visit Shelter Offshore for the latest articles, guides and resources.


MORE RESOURCES:
This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news


Forbes

4 Types Of Content Real Estate Marketers Need To Be Using
Forbes
The real estate world has changed drastically over the last few decades. While the industry has evolved more slowly than many other sectors, this makes it the perfect industry for innovative thinkers. With the growth of digital media and technology ...



New York Times

When Furniture Rains from Above
New York Times
Q: I live in an Art Deco condo tower with terraces tiered like a wedding cake. Recently, two wooden chairs and a large dining table fell from a terrace above, tumbling onto a common area, and then down to my private terrace, damaging patio tiles and a ...



The San Diego Union-Tribune

Commercial real estate recovery extending 3 years but retail retrenching, survey shows
The San Diego Union-Tribune
But the survey of developers, lenders and various real estate institutions for retail real estate is more pessimistic since Congress approved tax cuts late last year. The report said the tax changes make commercial real estate more attractive because ...



Forbes

Must-Know Social Media Strategies For Real Estate Agents In 2018
Forbes
Without tools, human would have ended up in the same graveyard as dinosaurs. Instead, we put footprints on the moon. And I have to hand it to real estate agents — they've been pretty good at utilizing a variety of tools. I know they've broken in their ...



The Spokesman-Review

Motley Fool: Easy real estate income
The Spokesman-Review
Real estate investment trust Realty Income (NYSE: O) is a company that Aesop's tortoise would be proud to own. Since listing on the New York Stock Exchange in 1994, it's raised its dividend by 4.7 percent annually. That rate isn't going to win any ...



Hollywood Reporter

LA Real Estate: How to Spot a Shady Broker
Hollywood Reporter
It's a boom time for real estate brokers. Next to developers, no other industry has benefited more directly from Southern California's red-hot market. And for Los Angeles' top firms, the past 12 months have been a head-spinning time of record-breaking ...
10 Questions to Ask a Real Estate Agent Before the Pro Helps You Buy a HomeRealtor.com News

all 17 news articles »


The TokenHome ICO is About to Launch – Changing The Worldwide Real Estate Industry Overnight
Bitcoinist
Malaga, Spain, February 14, 2018, Real Estate Investing has always been a preferred method of increasing one's wealth. The problem has always been that most people do not have the required amount of money to even start. All that is changed thanks to ...



Investing In Real Estate: Can You Short The Dollar?
Forbes
Thomas Black, M.D., is the co-founder and managing partner of Napali Capital, a Texas-based real estate investment firm. Thomas Black , Forbes Councils. I was driving my son to school recently when he turned to ask me a question. I've always encouraged ...



Forbes

The Future Of Real Estate Tech: How We Got Here And What's Next In An Exploding New Ecosystem
Forbes
Driving this investment explosion is the evolution of real estate tech from its initial phase of software and marketplaces complementing the incumbents to a new era where tech enabled players are going head to head against the sector's largest ...



Inside Tucson Business

Commercial real estate heating up in Pima County | Construction ...
Inside Tucson Business
The forecast for the Tucson metro area's commercial real estate market is bright.

and more »

Google News

home | site map | Blog |
Portland Oregon Real Estate Listings | real estate investing | real estate in greece | for sale by owner in atlanta | House for sale: Louisville KY
Exchange Links Here | Links page |
© 2006