Regardless of how the market is doing right now, real estate has always been a reasonable investment. They’re not making more land and the market will eventually pick back up. This is all a part of the ebb and flow of market economies. Things get bad. Things get worse, and so on. Many investors are finding a bright spot with these investments by purchasing homes and properties at auction. Some have called this predatory. but the simple fact is that it’s a win-win situation for everyone.
Currently, it seems as though investors might actually be part of the solution in a market that isn’t projected to make any improvements for several years. The answer seems to be, at least for now, up to the investor. The market currently has a surplus of distressed properties that are sitting idle and not making anyone money. It’s very difficult to get a bank loan right now and auctions are seeing quite a boom. These purchases are being made with cash because the properties are cheaper.
Foreclosure auctions are becoming commonplace as more Americans are leaving their homes behind and turning to rental properties. It’s been tough for people who once had homes to pack all of their things in a StorageMart and rent out a tiny apartment. Renting has seen a sharp spike ever since things got bad and it’s opening up a new market. This has allowed some investors to buy up several properties, and offer affordable housing options to those who don’t qualify for home loans. That way large families don’t have to be forced to cram into tiny apartment buildings. They can rent a recently purchased distressed property and live comfortably without having to buy.
Investors are now able to cheaply purchase properties that would have been too costly before now. These properties are then rented out or sold at little cost to the investor. It hasn’t been easy though given that banks aren’t lending much if at all. For investors who are able to get the capital together, they can pass along the savings to homebuyers that might not have been able to buy before now. Homebuyers are, effectively, able to buy or rent more house for their money. This mini-boom in the market is fostering a growth in investment that, even though it’s not as lucrative as it was before the housing bubble, is still proving an effective investment strategy.
This solution comes in with investors with cash. Some are advocating that the government help investors more easily purchase distressed properties, rehabilitating these idle properties, and then turning them around towards viable rental properties. This isn’t being touted as the sole solution, but as one option. Wherever you land on this issue, the fact is that banks and the government simply aren’t doing enough to ease the burdens on investors or homeowners. It seems as though they’re taking the same approach as the citizen, and sitting on these properties until things even out, but we’re not going to see progress until the market takes a fresh approach to solving this issue.
