Is it a good time to buy an investment property

from what I see residential real estate prices peaked in 2005. Deflation is out there on a global scale and its possible the entire global economy deflates or an inverse wage/price spiral. Basic supply and demand would curb this to a certain degree but the specter of deflation is pretty scary as most businesses are based on the assumption of future growth. Buy real estate with at least 3-5 year horizon or buy it with a smile knowing you got a good price. :)

http://www.nahb.com/generic.aspx?genericContentID=527

this guy is pretty interesting maybe a little too gloomy but he is
one of the most knowledgeable experts on "money systems" out there.

http://www.realitysandwich.com/blog/bernard_lietaer

http://www.transaction.net/press/interviews/lietaer0497.html
 
I've owned lots of rental property of all kinds (Fort Worth, Tx.). I hated it, but it served me well financially....esp. during inflationary times. Management companies aren't that good unless you own enought units to afford the best......and when you are personally involved it is very stressful. I had many great tenants.....but a few bad ones will make you a seller. Stosh
 
Quote from ashatet:

I do not trade anymore but I have some investments in the equities and metals etc in the 401K.

Is it a good time to buy a condo or a town house for an investment purposes. Or should I just hold on to the cash?

I understand that the prices can fall another 10-20%, but one can almost never catch a bottom.

I have done some math and the rent should pay for the condo if I get a 15 year loan.

On the other hand, if I can pay with cash, there are some compelling deals in foreclosures.

The only way I lose big is if I can not rent the property out and the association fees go through the roof with large number of vacancies.

I have respect for the ET community, so I am expecting a well balanced response. Please no perma bears with their doom and gloom scenarios.
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I suggest buying tax liens. (Actually loaning state governments moneys for 12% - 24% annually) You have little risk. You can be picky on the property. There are no tenant hassles and you have high interest earnings. You are the first person on title ... even before the banks ... so possession of the property is a slim possibility. Loan term is short. Functionally you are investing in real estate and are guaranteed by position on title ... without the hassles. A friend of mine has done all the homework and shared it with me in a "whiteboard" meeting.

I liked it.
 
This is just not true. Sometimes its much more economical to rent. I started making big money in about 2005 but I live in a high priced area. I could have bought something and caught the last phase of the bubble but I would be sitting in a pile of shit now if I did. I was smart to wait and keep renting. My 100K in rent over the last 5 years was money well spent.

Quote from ashatet:

Thanks to all for some great points. My reason for wanting to make this investment is the lack of better opportunities elsewhere. I am also ready with the possibility that I will just keep the property to myself. I already have quite a bit of investments in foreign bonds, equities, agriculture and metals.

I understand that rental property is a catch 22. You want good tenants, but good tenants are sensible people, but sensible people generally own homes and not rent them. So a good renter is an oxymoron.

A good rental income does not hurt in retirement either. Just about all my friends have suggested me to stay away from being a landlord. I will see how it goes and start one at a time.
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Quote from KINGOFSHORTS:

Condos/townhomes are still way overpriced. Wait 2 more years, you should get them for 30% cheaper.
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They may fall more, they may not. There are good people who rent property, even some that are on gov't assistance. If you are an active manager, flexible and realize it will be a PT job, these are great times to be shopping for cash flowing rental property in my opinion, especially if you are willing to commit to 3-5 years. Here in MN, occupied units cash flow well enough in some situations to the degree where acceptable returns are not even reliant on any price appreciation.
 
Quote from nazzdack:

1) Real estate and stocks tend to perform "well" from the middle of the decade until the end of the decade. The first few years of the decade tend to be "bad". You can sidestep that by waiting until 2013-2015 before buying and hoping for capital gains potential on the property in addition to rent and depreciation.
2) You may underestimating the downside potential with buying property now. There are many ways to "lose big". :eek:
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Good points, especially point #2;
NasdaQQQ

Frankly, like to buy & sell[occasionally, mostly thru a REALTOR, done FSBO also ........]]real estate, past 25+/years;
my records shows RE = IS/has been more profitable & trends better than ANY stocks/options/derivatives.........................................

However a conservative real estate[local bank -more or less ] loan couild be considered ;
a derivative ............................................................................

Only liars cactch the bottom or tops all the time;
even though quite a few internet posters ''claim'' to catch the bottom & THE TOP...........:D Only liars do it all the time!!

Perhaps a buyers market in many areas[TN too];
but there are still plenty of good reasons to name it a'' buyers market'' I watch west TN market. look @ comparative sales on seven[7] states touching Tennessee............................................

Solomon said ''in all labor there is profit''.
Probably a good RE price, good research & a good closing attorney is more important than any ''catch the bottom/top fantasy''

Plenty of money has been made[and lost, lots lost ], here is why, in condos;
[usually avoid them,myself] they roller coaster more^^^^^^

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^That means its easier to lose money[than a tighter TREND]........................................
I would accept a free condo as a gift, if my closing attorney agrees,LOL:cool: :cool:
 
Quote from unretired:

I suggest buying tax liens. (Actually loaning state governments moneys for 12% - 24% annually) You have little risk. You can be picky on the property. There are no tenant hassles and you have high interest earnings. You are the first person on title ... even before the banks ... so possession of the property is a slim possibility. Loan term is short. Functionally you are investing in real estate and are guaranteed by position on title ... without the hassles. A friend of mine has done all the homework and shared it with me in a "whiteboard" meeting.

I liked it.
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Sounds like free guaranteed money, it's a shocker that this investment concept has been around for decades and still is an ATM machine.
 
Quote from murray t turtle:

==================
Good points, especially point #2;
NasdaQQQ

Frankly, like to buy & sell[occasionally, mostly thru a REALTOR, done FSBO also ........]]real estate, past 25+/years;
my records shows RE = IS/has been more profitable & trends better than ANY stocks/options/derivatives.........................................

However a conservative real estate[local bank -more or less ] loan couild be considered ;
a derivative ............................................................................

Only liars cactch the bottom or tops all the time;
even though quite a few internet posters ''claim'' to catch the bottom & THE TOP...........:D Only liars do it all the time!!

Perhaps a buyers market in many areas[TN too];
but there are still plenty of good reasons to name it a'' buyers market'' I watch west TN market. look @ comparative sales on seven[7] states touching Tennessee............................................

Solomon said ''in all labor there is profit''.
Probably a good RE price, good research & a good closing attorney is more important than any ''catch the bottom/top fantasy''

Plenty of money has been made[and lost, lots lost ], here is why, in condos;
[usually avoid them,myself] they roller coaster more^^^^^^

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^That means its easier to lose money[than a tighter TREND]........................................
I would accept a free condo as a gift, if my closing attorney agrees,LOL:cool: :cool:
More...


You have to be very careful with condo projects, if there are ten units, with five tenants and five are belly up someone is going to get screwed big time. This happens in a lot of vacation areas ie Hawaii where the whole project goes belly up, very ugly. This is becoming more common in the big cities as the Big Squeeze continues.

http://www.miamiherald.com/2010/03/07/1516872/blanket-receivership-another-way.html
 
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