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5 Secrets for Surviving a Real Estate Market Downturn
History repeatedly serves to show us that the real estate market is cyclical. It has boom times and stagnant times, occasionally it suffers a crash but real estate never becomes worthless, therefore if the experts are right and we're about to suffer a slow to stagnant period in the real estate market, all is not lost! There are 5 fundamental secrets that real estate investors like to keep close to their chest and they are the secrets that enable them to survive and even profit during a bear market. This article blows the lid off the secret world of the professional real estate investor! 1) Aligning For Profit in a Bear Market When professional property investors believe the market is entering a downward phase i.e., changing from Bull to Bear - they will change their investment strategies accordingly. One method that tough investors apply is to buy up property in the best areas that they can afford once a market is slumping already. Professional real estate investors know that the best areas for property always boom again very early on in the next property cycle. By working in this way they can then leverage their investment by selling their property early on in the boom cycle and buying elsewhere and always remaining one step ahead of less professional investors or average home owners. Up and coming areas will eventually peak as well of course as they are swept along on the tide of the boom, but they will not peak first and investors in these areas will have to wait longer to see their profits. Professional investors will likely enter these areas just before they peak and sell up just before the heat goes out of the market enabling them to again buy up what they can afford in the best areas thus positioning themselves ready for the next upward trend. And so it continues! 2) Slow Down Your Speculating You may already have decided that the time is no longer right to be over extending yourself and you may have cut back on your property purchases, but remember that making any home improvement or taking on any renovation projects during a downward period of the property market is also considered to be speculating. Don't just assume that capital appreciation from your property will justify home related expenditure right now?in a bear market it won't. 3) Never Forget The Supply and Demand Theory Property prices don't go up infinitely, if you examine the ebb and flow of the market in the US over the past decades for example, you will see that stand alone investment in real estate would've returned you gains of just over 1 percentage point above inflation! There comes a point in every market cycle when the market runs out of investors willing to buy up at the top prices and there comes a point when first time buyers are frozen out of the market. As demand dries up, over supply brings down prices and this stops the entire market in its tracks. If you remember this fundamental fact and examine the movement of the market closely and carefully you will be able to see when supply is about to outstrip demand, you will be able to watch first time buyers reigniting the market, you will understand when the time is right to sell and when the time is right to buy. 4) Balance Real Estate Exposure You may assume that your only exposure to the property market is what you physically hold in the way of real estate assets - but don't forget all your paper investments as well. Do you have money invested in REITs, do you have funds that invest in commercial property as part of the underlying portfolio, what about your retirement fund, which market sectors are the find managers investing in on your behalf right now? Don't assume that fund managers will make the right decisions at the right time on your behalf, you might be able to see the heat going out of the market quicker than they can react. If this happens you have to be prepared to rebalance your entire portfolio and move your exposure away from real estate if you believe the market is about to dip. 5) Protect Your Equity There is nothing more valuable than the equity you own in your own home. Do not put that at risk. It is very tempting in a boom market to re-mortgage yourself back up to the new greater value of your home, but in so doing you expose yourself, your family, your home and your future to unnecessary levels of risk. Secure the roof over your own head first and foremost, and only then proceed into the greater real estate market with care! Do not be tempted to secure any extra loans or mortgages on your family home. Professional and wise real estate investors worth their salt will always secure their own position first and foremost. Rhiannon Williamson writes for real estate investors, international investors and expatriates via her site http://www.shelteroffshore.com/ If you want to discover the latest investment property hotspots, learn about investing offshore or become an expatriate and living and working abroad, visit Shelter Offshore for the latest articles, guides and resources.
MORE RESOURCES: 200 apartments planned for Beachwood’s Commerce Park Cleveland Jewish News Gisele Bündchen's Houses: A Peek Inside the Supermodel's Real Estate Portfolio Architectural Digest UBS flags commercial real estate downturn as a top risk Yahoo Finance Refined Real Estate: 1937 Colonial Broadmoor home lists for $2,595,000 seattlerefined.com Why Every Residential Real Estate Investor Is Suddenly Richer Financial Samurai The Pipeline: Commercial real estate roundup for 3.29.24 RichmondBizSense EG Real Estate: 4 New, 4 Sold – East Greenwich News East Greenwich News Most Impactful Real Estate Leaders 2024 - Forbes Lists Forbes Middle East Australia’s Gold Coast Is Primed for a Long-Term Real Estate Boom—and There’s Still Time for Buyers to Get In Mansion Global Renting versus buying a home: Has the math changed for today's Bay Area real estate market? San Francisco Chronicle Breaking Barriers: DePaul's Department of Finance & Real Estate holding first DEI Conference – REJournals REjournals.com REAL ESTATE | Auto Safety Center adds third location washingtoncountyinsider.com San Antonio real estate: Tony Parker's Hill Country mansion San Antonio Express-News REAL ESTATE | What would you like to see at the old Kettle Moraine Bowl? washingtoncountyinsider.com REAL ESTATE | New $6M water treatment facility on N. Main Street in West Bend, WI washingtoncountyinsider.com Engel & Völkers Acquires North Fork Real Estate Agency Behind The Hedges Search the latest Macon County real estate transfers Herald & Review REAL ESTATE | Spring Storewide Sale underway at General Store Antique Mall in Kewaskum, WI washingtoncountyinsider.com Residential real estate market sees modest price and inventory increases so far this year Montrose Daily Press Southern Utah real estate, tech industries partner with Make-A-Wish Utah to grant local kids' wishes St. George News RI real estate transactions: What homes sold, for how much and to whom The Providence Journal FBI is investigating Eastside real estate firm iCap, lawyers say The Seattle Times Spring Bengtzen and Utah Life Real Estate Group Partners with PLACE For Next Level Growth goskagit.com See the latest Coles County real estate transactions Journal Gazette / Times-Courier Welcome to Real Estate Friday! theberkshireedge.com The future of real estate starts now CapeGazette.com Real estate terms and commissions are changing – Cache Valley Daily Cache Valley Daily Darien and Rowayton Real Estate Report: March 21 to 28 darienite.com What you need to know about the NAR real estate commission lawsuit? Sarasota Herald-Tribune TU launches first in state Center for Real Estate Studies 2 News Oklahoma KJRH Tulsa Here's a roundup of 6 key first-quarter KC real estate developments - Kansas City The Business Journals Wylie High School offers new real estate class KTAB - BigCountryHomepage.com AspenTech HQ Renewal Named Suburban Office Deal of the Year by Commercial Brokers Association Boston Real Estate Times How New Rules for Real Estate Commissions Could Affect First-Time Buyers The New York Times See How Commercial Real Estate Deals Are Being Cut As Debts Mount Business Insider Solano Real Estate Scene: The Dream For All lottery opens Wednesday Fairfield Daily Republic Why S&P Cut Outlook for Five US Regional Banks With Heavy Commercial Real Estate Exposure Investopedia Local opinion: A new world of real estate commissions? Arizona Daily Star VIDEO | REAL ESTATE | Sneak peek inside the new Auto Safety Center South in West Bend, Wi washingtoncountyinsider.com Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic Brave New Coin Insights Pummeled Blackstone Real Estate Unit Seems Poised for a Revival | Chief Investment Officer Chief Investment Officer Real estate giant Compass to pay $57.5M to settle clams it overcharged US home sellers New York Post MAKING YOUR REAL ESTATE DREAMS A REALITY | Real Estate- Sale/Rent coastalbreezenews.com Cincinnati real estate market: Realtors talk about spring season The Cincinnati Enquirer Current Real Estate Roundup - March 28, 2024 Nantucket Current Branson Mayor Milton addresses questioned real estate agreement Branson Tri-Lakes news This new digital real estate platform wants to solve Denver’s unrealistic listing prices The Denver Post Longtime Minneapolis real estate company to bring industrial buildings to Colorado Springs' east side Colorado Springs Gazette Crombie Real Estate Investment Trust (TSE:CRR.UN) Given a C$16.00 Price Target at Raymond James Defense World Cervera Real Estate opens Palm Beach, West Palm Beach offices South Florida Agent Magazine The Office Market Is in Turmoil. So Why Are Rents More Expensive? The Wall Street Journal D.C. developer to acquire Gallery Place, clearing way for Monumental entrance - Washington Business Journal The Business Journals Squatters 'claim everything to be theirs,' real estate agent says WPTV News Channel 5 West Palm Neuberger Berman Real Estate Securities Income Fund (NYSEAMERICAN:NRO) Share Price Crosses Above 50 Day ... Defense World Claremont Hotel bought by Ohana Real Estate from Fairmont Hotel and Richard Blum - San Francisco Business Times The Business Journals Christie's International Real Estate The Laurel Magazine of Highlands NC and Cashiers NC Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLRD) Short Interest Up 352.0% in March Defense World Real Estate Select Sector SPDR Fund Sees Unusually Large Options Volume (NYSEARCA:XLRE) Defense World Opinion | Real estate feels too darn expensive. But are commissions to blame? The Washington Post |
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