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A Buyers Market: Investing Money in Real Estate during Recessions

By Charles Hopkins Published 01/22/2009 | Finance
The idea of investing money in real estate during recessions seems to be in bad taste. Many investors raise their eyebrows while hearing such an idea. The real estate market is in doldrums. There is no investor security in the real estate markets. Many banks and private financial institutions have withdrawn from mortgage loan markets. Some of the prime lending agencies lost already their reputations and moving towards bankruptcy. In this dilemma, how can any investor safely put his hard earned money in real estate?

If you think little more widely and patiently, you can find many ways to invest in real estate market safely and profitably. It is true that the present market is not favorable for short sales and short term gains. But it is surely a good buyers market now. It is beneficial for those investors looking for long term investment. As the population increases and new utilization of land come, the available vacant lands and residential apartments or houses are shrinking. One has to do the transactions within the available properties and houses. The demand goes up and availability comes down. Present market and the dullness in the market are really short term phenomenon. The market will boom back within a short period.

Present real estate market analysts vow that by the first half of 2009, the market will come back to its prestigious position. The demand for the houses, apartments and properties will be growing much by that time. Once demand goes up, the prices of the houses also will be moving high. Now is it clear? If you have enough houses and properties in your hand, you will be able to sell them during that period for higher prices. Best idea is to purchase the houses now for low prices and keep them for a year and sell it when the price is high. You will surely get lucrative returns.

Foreclosure houses are the best options for investment in real estate. They will be cheaper. The availability of the foreclosure properties is more now. Due to the fiasco in the mortgage field, the number of foreclosures has grown multitudes during the last six months. The primary reasons for the sudden increase in the foreclosure can be attributed to the increase in the mortgage interest rates and also the increase in the cost of living. These led to the non payment of monthly installments and reached ultimately the point of foreclosure.

As the financial institutions are worried about their principal amount and the interest thereon, they will sell off the property at that cheap price. The statistics regarding the foreclosure auctions puts the price of sale at about 40 % of the real value of the property. So there is absolutely no doubt that present real estate market is buyer friendly and best for long term investment.