Real Estate Investing

Yesterday, we discussed why a buyer’s market is the perfect time to invest. Here we present a more in-depth look at nine reasons why this is the case.

9) More selection – Even when it’s a “buyer’s market,” that doesn’t stop people from selling houses. There are dozens of reasons people need to sell quickly, like death, divorce, job transfers and impending foreclosures. Now is the time to find that perfect house at a price you never imagined.

8 ) More room to negotiate – Even when new home builders are auctioning off property, buyers are still able to negotiate price and incentives. To sweeten the scenario even more, there are considerably fewer buyers to compete with for two reasons: the subprime fallout makes it more difficult to obtain credit and people are scared because they can’t sell their existing house. This fact combined with the current high inventory makes it a no-brainer situation, especially for investors.

7) Greater room for appreciation – A great deal on the front end leaves more financial wiggle room for home improvements, even the smallest of which can drastically improve profits. Lower overhead costs mean profits are maximized when selling time arrives.

6) Extreme Home Makeover – You will suddenly find home listings regularly advertising beautiful landscaping, new roof, new paint, renovated kitchens and baths. Homes are more likely now than ever before to be move-in ready.

5) Seal the deal – Other perks presented by sellers to prospective home buyers may include vacation getaways, season sports tickets, cars, home warranties or picking up the closing costs. Many sellers are truly that eager to close the deal. Buyers will also be in a better position to request such incentives - particularly the more common ones like seller-paid closing costs.

4) You live where? – The inner-city market, particularly where there is government-subsidized housing, is almost guaranteed to be down initially. Good deals are common in these areas, even though these areas are trending toward the renovation of old structures, the infusion of yuppie residents, revitalization of businesses and skyrocketing property values.

3) Green acres – Rural areas present a similar situation - the market will be considerably cheaper the further out you go. However, more people are getting into the idea of escaping the pace of city life, with commuter trains and carpooling more popular than ever before. Hence, getting in on the ground floor in an area nobody may want to live at the time can mean big profits when retailers, corporations and yuppies start taking interest in the area.

2) Down payment – Lower costs mean your down payment savings go further. It can also help buyers get above the 20 percent downpayment mark, allowing them to escape PMI payments.

1) Taxes – There is never a bad time to own a home. Tax benefits and credit record improvement are tremendous incentives to become a homeowner, but a down market is obviously going to be the smartest time to do so.