Real Estate Investing Tactics

There is very little doubt these are troubling economic times. But, they are not the worst economic times since the Great Depression no matter what the liberal spin machine keeps saying. These times are bad and will be prolonged but so far they are not as bad as they were in the late 1970's and early 1980's.

However, I am not writing this to point out the bias in the media or the fallacy of their arguments. Why? Because they create a perception in the marketplace that we as investors can and should take advantage of for our benefit.

Inflation will be much higher because money is being pumped into the economy at an astonishing rate to keep interest rates low in an effort to prop up consumer confidence. The question of a return of inflation isn't one of "if" but "when". The only way to counter inflation is to raise interest rates and pull money out of circulation. But that will drive up interest rates and dampen consumer confidence which will ...

Look, we don't have to be a dog continually chasing our tail.

Here is the thing, whether we are at the bottom of the real estate market or still have another 20-30% to go, now is the time to buy real estate as long as you buy it smart. It is not the time to over-pay. It is the time to bargain hunt.

We are creating a generation of renters.

A big part of the Great American Dream used to involve homeownership. Well, it wasn't really ownership because a pitifully small percentage of people actually own their homes. They usually have a mortgage and that means they are just renters that are a harder to evict.

Because of what they have witnessed over the last few years, we have an entire generation who don't see the "mortgage thing" as a big part of their future. We are creating an entire generation of renters. Sure, there has always been some percentage of the population who prefer to rent but that percentage will double or triple over the next couple of decades.

Real Estate Always Keeps Pace with Inflation

I know, you look around right now and think I am nuts. But, the last couple of years have been an anomaly. Not unprecedented. Not unheard of. Just unusual enough that few if any alive today have seen anything like it on a nationwide scale.

However, when you plot real estate prices over any 10 year period you will see that as an asset class it always keeps pace with inflation.

Rental Real Estate is the only asset class that pays for itself just by holding it.

Unlike any other investment you can name, rentals pay for themselves unless you pay too much for them when buying them.

Each month your tenant pays a rental amount that covers the payment, taxes, insurance, repairs, maintenance and profit. If yours don't then, you did it wrong.

That means each month your tenant is increasing the equity you have in the property.

It is my firm belief the current market conditions will reward serious investors with handsome profits. I do not think I am exaggerating when I say every $1000 invested in real estate today will be worth $15,000 or more in the next 15 years. The reason is your tenant covers all of your expenses and pays for the asset.

Those who buy in this economy will thrive, those who wait too long will just survive at best.