As a tangible asset, USA real estate is one of the best investments a person can make. However, like any investment, market research and timing is critical. A person can make money in USA real estate in any market condition, but only if they know what strategy to use for a given set of conditions.
Why Is USA Real Estate A Good Investment Right Now?
What kind of real estate market conditions do we live in now? Since the United States housing bubble burst in 2006, prices for homes have been falling. In addition, the number of homes in foreclosure has risen to the point that it could still take several years to even process all of them through the court system.
In the USA today, it is a buyers market, and many people are motivated to sell.
These are precisely the type of market conditions that seasoned investors look for to find opportunities. Now granted, we may not be at the bottom of the market yet. That could still take another 2 to 5 years of decline for some markets. Since market conditions are different in the different geographical locations, our job one is just to get started.
NOW is definitely the time to start looking for great deals on property. Remember, Real Estate is all about Location. Markets exist through out the USA that are much better positioned for a rebound than others. It is very important to understand that when you read articles on Real Estate you need to decide if it is a topic of general National interest or a specific topic to a specific real estate market. With approximately 315 different real estate markets in the USA, picking the correct LOCATION for getting your real estate goals accomplished should be your biggest interest.
Some would argue that the cost of upkeep and high property taxes make real estate a bad investment, however, if an investor plans to rent the property, then that property is being purchased using other people’s money (OPM). This is the kind of strategy that creates cash flow for the investor and offsets expenses while paying off the price of the property.
There are also tax advantages to owning a home. Mortgage interest is tax deductible if the mortgage balance is lower than the home value. There are also capital gains exclusions and preferential treatment for capital assets when the house is sold.
Getting a good deal in this market is easier than even a couple of years ago. In many cases, the value of a property for sale has now fallen below the mortgage value, or even the amount of the property tax. The homeowner will likely walk away from the property, leaving it to be seized by the government and later put up for auction. Investors will then come in and bid on the property for pennies on the dollar.
Yes, there are many reasons for not investing in USA real estate right now, including mortgages that are higher than the property value, hidden tax liens, and more. For many people, these reasons will keep them away from buying, but for the experienced investor, and those willing to do some research, it is precisely at crisis times like we are in now that opens the door for the greatest opportunities. This is why so many of our Foreign friends are coming to the USA to invest right now, they believe we are in the “Perfect Storm” for USA real estate investing.
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