Is Now the Time to Invest in Real Estate?

January 8, 2010

I always liked being the center of attention, even as a kid in my grandfather’s restaurant where I frequently accompanied the piano player – probably to the chagrin of those trying to enjoy their food.

I still get the same attention now – without the singing, mind you –  because my business is the business of real estate. When anyone finds out I am a Realtor, the subject of conversation invariably hits on “How is our market?”. I love this, of course, because it is one of my favorite subjects.

In reading today’s Tycoon Report, I came across a blog addressing real estate in Florida and how the economic indicators point to NOW as a terrific time to get off the sidelines and hit the field.

One thing you will note in this article is that the author addresses investment to “hold and lease” – much different from Speculation – which is the type of investing that got us into so much trouble. If you purchase property or any investment for that matter in anticipation of earning money from the short term sale of that property – you are a speculator. While in some areas of the country that gambit has paid off, most have seen  their dreams of instant wealth vanish before their eyes. I am still amazed at people that lost money through investments during the debacle with the attitude of “easy come/easy go” but when the same thing happened in real estate, they were shocked and felt that they “were done wrong” by some entity and should be “bailed out”. Why did they expect protections for speculating in real estate that they did not expect for stocks? Gambling is gambling, no matter what you wish to call it. While I love a go at the Craps tables occasionally, I promise you that the Pit Boss is not going to give my money back just because I do not know what I am doing!

Let’s take a look at real estate as a true investment without the specter of Speculation hanging over our heads. Purchasing a property to hold and lease no longer takes into account the sole expectation that the property will appreciate (there are no guarantees in this world) but sets the expectation for a reasonable rental income (backed up by factual past rental data for that particular type of property and area) and then perhaps the hope of some accrual of appreciation at the end of the life of that investment (icing on the cake but not the batter itself).

Self-Directed IRA’s could be a good way to fund your investment but you need to know that this is heavily regulated and you would not want to make an improper move that would endanger your IRA protections. I would talk to a Self-Directed IRA specialist before moving in this direction. Also note the words “Self-Directed”, meaning you need to know what you are doing. Hire a professional Realtor to assist with finding the best properties to meet your investment goals. Word of caution: Do not be tempted to jump on the latest Foreclosure just because it looks like a “deal”. There are many factors that go into finding a viable leasehold investment and “deal” is not at the top of that list.

All in all, now is a terrific time to investigate real estate as a long-term investment to add to your diverse financial portfolio. Good Luck!

Real Estate prices across US – Great mapping tool

November 20, 2008

I just got this today and thought it was fascinating, and I think you will too.

You can move your mouse across most cities in the USA and by clicking on the little house you can then see the median price and the drop/gain in prices.  As you check on the median prices and the average increase or decline from the previous year, you will note that the Houston Market is very strong compared to the majority of the nation. Unfortunately, the Katy/West Houston area is not defined on this map but I will be happy to share that we have been in the # 1 and # 2 position for hottest markets in Houston for the majority of 2007 and 2008. Katy is still very strong and a wonderful place to purchase property and to raise a family.

To see the map click HERE.

As reported on my blog and in my newsletter, houses are being gobbled up now in some markets. In fact, many buyers are purchasing properties in depressed areas, sitting on them and waiting until the market conditions improve. This tells us that there is promise, after all we all need a place to live !

If you are sitting on a stagnant or decreasing IRA or 401K, did you know that you can move those funds (without penalty) into a Self-Directed IRA plan with a trustee/custodian and purchase real estate? Sound interesting? This a fabulous way to have more control over your retirement accounts as well as have the liquidity to move into the real estate market. I know, there are nay sayers who feel that the real estate market is too risky.  Well, have you seen your stock holdings lately? Risky is too soft a word for what happened to many of us. The interesting thing is while many stock holdings have lost up to 50% of their value, most real estate markets have held firm – with the exception of the speculative markets of California, Florida, Nevada and Arizona. These are markets that were unrealistically inflated by speculation and needed a correction – much like the dot com stocks several years ago. Of course, these are the only market we hear about in the news so everyone thinks the entire nation is up for a Fire Sale. Nothing could be farther from the truth.

When I speak about real estate investing, I am not speaking about speculation. That is a very risky enterprise and not a place to put your retirement funds. There are many solid real estate investments out there. In fact, the Warren Buffett’s and Donald Trump’s of the world are already adding to their portfolios. 

I am happy to share more information about Self-Directed retirement accounts and how you can take control of your nest egg. Good Luck and Happy Investing…