If you know what you are doing then real estate investing can be the most effective, and profitable, way to invest your money long term. But what about real estate investments for the short-term, quick return investor? In today’s real estate market many people are shying away from real estate investing because it seems like everyone is getting foreclosed on and making a profit in real estate is impossible. You have to remember that real estate investing, just like the stock market or any other investment, is cyclical. Yes the market is down right now but that is only after many years of a boom in the real estate market that created many new millionaires and added to the portfolio of already established real estate investing experts. So you can rest assured that the U.S. economy, and the real estate market, will make a comeback. If you really look at it, logic would suggest that it will make a huge comeback and if you want to be part of that initial windfall then the time to get involved is now.
Just like any other investment real estate investing is risky so always know that there is a risk to investing in real estate. But the chances that your real estate will appreciate in value are very good over time. It is just a matter of how long you can afford to wait. What you should be doing is scouting out properties to invest in because right now many prime pieces of real estate are available for prices that they may never be available for again. Homes that you never thought you could afford could be bought off the foreclosure market for a fraction of their original cost and held by you to be sold for a profit later. But what can you do in the interim to quickly increase the value of that home and maximize your profits even more? It is called house flipping.
Flipping Is The Fast Money Maker
Flipping a house means that you purchase a property at a price that is significantly below its assessed value, fix it up, then sell it for a profit. In a normal real estate market this is the best way to make fast money in real estate investing. But in a market like this you have to be a little smarter with your real estate investing and realize that flipping is still the way to go but the cycle will take a little longer than it does in a good market. A house flip that would normally take weeks you may have to hold on to for months in this market, but with the rate of foreclosures so high, and the possibility that the government may give large tax breaks to people that buy foreclosed properties, the return in nine months or so could be very large.
Normally in a house flip you would buy a house in need of repair because those are the ones that have depreciated in cost but not necessarily in value. You would do the repairs and then put the house on the market for a large profit. If you take the time to become a little savvier with real estate investing then you can use this current mortgage crisis to become a house flipper that invests in foreclosed properties, fixes them up and then waits for the upturn in the market to sell them at a huge profit. The only variables you need to contend with is how long before the upturn and can you afford to hold the properties while you wait for the market to recover? If you can come to grips with months of holding costs then this may be the perfect time to make your money in real estate investing and you can add value to your real estate with the quick house flipping technique of fixing up the property to add even more value.