Real Estate Opportunities - Real Estate a Safe Business
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With two-thirds of Americans owning a home, it serves as the largest asset as well as the largest debt to many. Undoubtedly, the fear of housing bubble has grappled the psyche of many individuals. The question arises whether extensive decline in residential housing value is about to come and if so what will be its consequences on private homeowners?
One of the best ways to reduce price risk is by doing considerable homework on it before selling the property. It is necessary to keep the deal away from the effects of housing bubble. “Housing bubble” or a dramatic run-up in prices eventually culminates into their dramatic decline. Baker has extensively studied the various aspects of housing prices and reached the conclusion that leaving the occasional hike, housing prices increase at the normal rate of inflation. The inflation rate during the recent past has crossed every mark touching about 30%. Baker does not consider lower mortgage rates or increasing population as the factor of such inflation. According to him, increased renting prices have contributed greatly.
Locker is believes that a real estate investor should harp on making money. His aim is to earn profit at the end of the day after all transactions. Lower vacancy rates keep the landlord’s cost to a minimum. When the vacancy rates increase, they increase the overall expenses thus minimizing the profit. Jim states that bad trend in vacancy rates are worse indicators for residential housing prices. Buying property for real estate investment should be based on rational judgment rather than emotional aspects.
While investing, use the money that you will not require for at least five years. Evaluate the house from every aspect and think judiciously if it is feasible to retain the house even if its market value drops down. Find out if it has good value in the local rental market. Conclusively, you have to be vigilant and up-to-date about the real estate investment business then only it can be a paying one.
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