This is a difficult time for real estate. There’s no surefire way to make moneyReal Estate Investment in a lousy economy. Investments of all kinds are suffering, and real estate investments are no exception. The housing market took a beating following the crash in 2007-2008. Subprime mortgage lending practices were blamed for much of this country’s poor economic fortune. Faced with the prospect of an enduring bear market and depressed housing prices, what’s a savvy investor to do? If you’ve been hungrily eyeing the basement real estate prices in both the commercial and residential markets, you’re not alone. You’re also correct to identify an opportunity in all this misfortune. After all, isn’t “buy low, sell high” the ultimate investor strategy? Even though strong investment opportunities lurk in the sour housing market, you need a sound strategy to sniff them out and capitalize on them. Consider these tried and true strategies for making money in a floundering market before you ride in half-cocked.

Preforeclosures, distressed properties and REOs

Foreclosure and bank repossession have become epidemic since the economy crashed. The result is a slew of vacant properties in realtor or bank ownership that are priced to sell. Some of these properties are sold at auction. Others are available through brokers at bargain-bin prices. To take advantage of these opportunities, research an area that you think is likely to rebound. Foreclosed properties with little to no structural damage in areas that were doing well before the crash are the most likely to turn a profit. If you decide to go this route, don’t expect a quick flip. Homebuyers should expect to hold on to a property for five or more years to see a maximum return on their investments.

Become a landlord

If you invest in multiple properties that you don’t intend to live in, consider renting them out to tenants. An interesting side effect of the housing crash has been an increase in renters. You can use the rent paid by your tenants to subsidize your mortgage and property tax payments. In a few years you may even turn a profit. Research the landlord tenant laws in your jurisdiction so that you understand all of your obligations under state and local law.

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