Investing in a Changing Market

Investing in a Changing Market: "I get a lot of questions from people asking, �Will real estate investing work in my market?� The truth is, real estate investing works in every market, but you need to learn your market and adapt the techniques that it requires.

There are many ways to describe real estate markets, including �hot� versus �flat� or �rising� versus �falling� or �buyer�s� versus �seller�s.� All real estate markets are subject to fluctuations, but these fluctuations typically do not greatly influence the ability for the informed investor to make a profit. In fact, some strategies, such as flipping, can be the least risky way for a beginning investor to make a profit in an uncertain market simply because of the relatively short amount of time the flipper will own the property. Unlike the stock and commodities markets, real estate markets don�t rise and fall rapidly. For long-term investing, additional market factors are important to your buying decision. Investors who plan for short-term real estate market appreciation are speculating, which is outside of the basic model of low-risk investing.


What Is the Ideal Market for Investing?

Let�s be clear: there is no such thing as an ideal real estate market for investing. It tends to be more difficult to find bargains in rising markets, however, because if the market keeps rising, the probability of selling the property quickly for a large profit increases. In contrast, when property values are falling, more so-called bargains become available. Yet you need to assess the true value of these properties based on when you expect to sell the property. Thus, your purchase must be made at a steep discount to allow for a profitable sale later. "
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