Quote from Smart Money:
Thats because its making me a fortune. For the last two years, if I had listened to the bears, I'd have missed out on low interest rates waiting for a "crash" that hasn't happened. Real estate is a great investment if you're a buy and hold person and you know what you're doing. Either the property values go up, or rents go up. Read all my posts...you won't find one where I advocate anything other than buy and hold, though I might have said that true flipping, where you hold the property only a few months is relatively harmless because the time horizon is short, provided that the deal makes sense in the first place. People still make money today flipping. Playing the Condo deposit game was lunacy unless you were willing to lose all the money you put down, and many were.
Sure, there are some geographical areas where people lost all sense about how much they paid. But most of those people will still come out fine unless they were just stupid about how they financed it if they hold it through the downturn. Yes, some people sensibly bought properties with the intention of holding it long-term and then they had to sell due to death, divorce, etc. This is unfortunate. But people lose money on forced stock sales all the time....doesn't mean that stocks are necessarily a bad investment. They are just an investment vehicle like real estate, and when you make the biggest deal in your life you really ought to know what you're signing and have a historical basis for your decision making.
For the last two years, anyone who bought a house with the idea that they were going to live in it and make payments on it would have been better off than renting it with the exception of a few isolated areas...and then, only for people that had a short time horizon before they sold. Interest rates on fixed notes have risen about a full point since then and the associated lower payment more than offset any bobble in price. And now, someone who wants to buy will be trying to finance under stricter standards from a smaller pool of lenders who are more demanding. It was a window of opportunity that made many rich, but it is virtually closed now.
Its aggrevating reading articles about how homeownership dropped more than at any other time, or that foreclosures spiked compared to last year when homeownership is still near an all time high, foreclosures are below the historical average, and rates are still pretty low. I do firmly believe that if you want to buy a house to live in it for many years, now is a good time, and if you study up on real estate investing, you can still make a fortune in todays market.
Holding hard assets while inflation goes crazy is always good. Leveraging the investment at 10 to 1 and getting a tax break for it is freakin' awesome.
SM
