The following is a guest post from Rich Credit Debt Loan. The site focuses on mostly on topics of wealth building, a pretty rare trait amongst personal finance blogs. I encourage you to sign up for his RSS feed.
Right now, the news is filled with images of foreclosed properties, falling home values and pretty much bad news all around for the housing industry. Does that mean that now is the best time to take advantage of the housing crisis? Yes and no! Is investing in real estate a good idea? Yes and no! While there is no perfect solution for making money, there are many opportunities out there right now that could make a difference in your financial future. However, you're going to have to tread carefully before you jump in with both feet.
For the first time in many years, it is a buyer's market in real estate. Homeowners are desperate to unload their properties before they foreclose and auction sales are continually moving property for pennies on the dollar. Technically, this is a great time to pick up some really cheap property to turn into an income stream.
The main problem right now is that banks are often too shaky to offer you a loan that you can leverage to make that extra income. Unless you have perfect credit, you may find that it is almost impossible to get a loan right now. For those of us that prefer to leverage debt instead of sinking our own money into an investment property, it is a very stressful period. There are all of these properties out there, and it's difficult to take advantage of them.
This doesn't mean that you have to give up however. There are still plenty of ways that you can start leveraging debt to make more money. The good news is with so many foreclosures the renters market is incredibly strong. If you can find a property in good shape, that has not been trashed by the previous owners that foreclosed, you can start making money right now.
The key is finding those properties that are in decent shape. Not everyone that goes through a foreclosure trashes their home, but it is pretty common. Before you even think about buying a property at auction or from the bank, you're going to need to make sure that it is completely inspected. It is a great idea to go to the property yourself just to make sure.
If it is in good condition, it may be the right time to snap up that bargain and rent it out. Otherwise, you may find that you'll have to hold onto that property for a few years before you can sell it at a profit.
Now, let's talk about some alternative financing for the down payment (an example of good debt) since getting a loan from a bank is a little tough right now. Peer to peer lending is a great alternative to a traditional bank loan and you have the added benefit of getting a little more control over the interest rates you'll be paying. Many people are leveraging debt by using p2p loans at low interest rates with great terms. It's a lot easier to make extra money on a rental property when you're not paying high interest rates to the bank.
Photo Credits: 1
auction sales, buying a property, extra income, foreclose, foreclosure, home values, housing industry, income stream, investment property... and focuses on:
3 Responses to “Is Now the Time to Take Advantage of the Housing Crisis?”
Next: State of the Economy