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.
- 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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