Posted by: T. Argerous Filosofos | September 4, 2009

Income Property — Is it Time to Buy?


This whole economy thing has got me ( along with 5 billion others) confused. Too many questions that just don’t make sense. Are we in a recession or a depression ( my vote – Depression). Market on the uptick? Why are there more unemployed? Stimulus working – Why more loosing jobs? Why more business failing? I just dont get it. And I dont think our Govt gets it either. What I do know, is that now is a good time to be investing in Income Producing Property. Many are taking advantage of the markets conditions right now and are buying. I believe there is one thing that most everyone agrees with. The market is close to, if not at the bottom right now.

I tend to tell others to think of the RE market as you do the stock market with Cities as different stocks. They all go up and down at different rates. We all want to buy low and sell high. We should have sold our portfolios back in 2006. Now I think, we should be buying . I dont believe we will see any great appreciation in any markets for a long while and maybe never get back to the rates we saw in 2003-2006. But values will begin to rise soon but at a much slower pace. You still need to be cautious and make sure your deals are sound. If you get in now and look for the long haul you will be making some money. Dont buy for appreciation, buy for the long term. (5 yrs +) Now-  Which market should I invest in and then what type of properties within those markets?

As I said there seem to be signs that the real estate housing market is beginning to recover, although it is still very confusing, leading some to think that income property investment is still profitable. In the southern part of the United States, a 7.1% increase in home purchases occurred during the month of June.  Several of the federal government’s 12 regions, including New York and San Francisco, have been showing signs of returning stability and even California and Florida, the States most devastated by the mortgage crisis, are starting to bottom out. (Is this because of the $8000 Govt incentive?)However, not every region is experiencing the same growth. (Different stocks go up and down at different rates)

In general, the western half of the United States has not seen the same recovery rate as the rest of the country, and in places like Minneapolis, the situation might actually be getting worse. Nevertheless, the rising rate of unemployment may be preventing many Americans from feeling the recovery.  Overall, the economy grew towards the end of 2008. That gave many people hope for the future. However, unemployment has been growing even faster and may reach 11.2% by February of 2010. (Florida’s rate I think is about 11 % or more, among Construction workers about 53%) With numbers like that, many investors are beginning to wonder if an income property investment would be an acceptable way to augment their finances given the fact that income properties are becoming a catch 22 situation. Many investors don’t have enough money to buy investment property, and if they did, they probably wouldn’t need to buy them in the first place.

A catch 22 is a very grim assessment, but one that needs to be factored into any discussion about the income property investment or the market’s. The sad part about all of this is that no one seems willing to broach the topic of bailouts for the individual. In fact, Congress is steadily trying to cut down the length of time that people can file for unemployment benefits. It would be much more reasonable to work on cutting down the unemployment rate. If that was reduced, then it’s reasonable to believe that people wouldn’t need to file for unemployment at all.

At this time, the real estate market is deceptive. Mortgage rates are very low, and it’s clearly a buyer’s market. However, buyers are losing jobs at an astounding rate, and that usually makes it difficult to own a home. The bright side to all of this is that, for the people who already own an income property investment, it is also a landlord’s market. Investors may be faring better than almost everyone else in the country right now.

Even though i have gone thru an icreadble bad part of my life (Divorce, family health issues, deaths, loosing most of what I have) I am the eternal optimist. Things will get better. Now is the time time to invest. The market is at its lowests or colse to it and while no one can time the market with any certainty if you ar an investor you have one guiding principle – Buy Low, Sell High.

I am buying again, Starting to work the markets. Things will get better – dont know when exactly but they will get better and I will be among those who bought low.

If you are interested in where I am buying and would like us to find some properties for you in good undervalued, emerging and income producing markets contact me at info@tafgroupllc.com.

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