Archives for September 2010

Understanding Market Cycles

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In order to make profitable investments, it’s vital for you to understand the cycles of the real estate market because they directly affect the value of properties you may want to consider.

The first thing to understand that just like the weather has four seasons, so does the real estate market have four general cycles – an up market, a peak market, a down market, and a bottom market. In other words, just as temperatures fluctuate during spring, summer, fall and winter so do property prices in the residential real estate market go up and down in their cycles.

However, unlike weather seasons, market cycles tend to last longer – approximately seven to ten years. Keep in mind that these cycles are normal functions of dynamic markets and are affected by factors within those markets.

Now, let’s take a closer look at the four general markets and what goes on in each of them.

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The Roots of Appreciation

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Even during the Great Depression some people made money. The same holds true today despite one of the toughest economic environments in decades. The key is to understand the roots of appreciation or what causes real estate to go up or down in value. Because all real estate is local, it is entirely possible to purchase a rapidly appreciating property even in a declining industry… in fact, often the property is able to appreciate because of the decline in the industry.

Today we will examine the major elements that cause real estate to appreciate or depreciate in value. Once you understand these simple concepts, it's possible to use each to create your own working checklist when searching for target acquisitions.

  1. The level of motivation for both buyers and sellers. Although the real estate market as a whole is suffering a decline, there is a substantial need for housing for both buyers and sellers. Many sellers need another place to live and buyers are eager to take advantage of a once in a lifetime buying opportunity.
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5 Secrets of Successful Real Estate Investors

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Can anyone become a successful real estate investor? According to industry experts…the answer is a resounding “Yes”. Average Americans and heavy-hitting investors alike have historically embraced real estate as one of the most reliable methods available to generate real wealth. If anyone can succeed at real estate then it only stands to reason that there must be a series of steps or guidelines to be followed; a “formula” for success….and there is.

Research indicates there are five essential elements involved in becoming a successful real estate investor; steps available to almost anyone. Although they are not easy, they are very “do-able” with a bit of determination.

  1. Learn how to recognize real estate investing opportunities. Sounds simple enough but putting this into practice often requires the ability to think independently and go against the prevailing wisdom of the day. For example, tough economic times like those in the current fiscal crisis lead many to believe that real estate is a bad investment. Others see a major buying opportunity with historically low prices and the lowest interest rates in decades. Which are you?

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