What is a Good Economy for a Real Estate Investor?

Recently I was reading through Dave Paladino's blog and I came across a post that really caught my eye. It correlated with everything I've been reading about what a great buyer's market we are in and how the able-bodied should seriously consider investing in some form of real estate.

Dave wrote this post on Sept. 20, 2009, which is eerie because it sounds as if he's describing the Omaha we know today. A good economy for real estate investors, he suggested, looks different than a good economy for the rest of the business world:

1. High interest rate environment. Landlords compete with house payments, so the higher rates our competitors charge, the more we can also charge in rents.
2. Tight lending standards. If it is hard for people to borrow money, they are more likely to rent.
3. Less new construction of apartments. All business is supply and demand. The lower the supply, no matter how small, the less competition you have.
4. Big employment growth/low unemployment. [This wasn't in his original posting, but just to put Omaha's standing in this area into perspective, our unemployment rate is 4.7% and the U.S. average is 9.1%. Although our job growth, according to Sperling's Best Place is .09% - not very high.]
5. Net population increase. The more people looking to rent, the better. [According to the Greater Omaha Economic Development Partnership, Omaha has grown 12.8% in the last ten years and a 5.5% growth is projected for the next five years.]
6. High foreclosure rate. People have to live somewhere. It's not as if the demand for housing goes away.
7. Families living separately. This one is hard to measure, but it is really good for our business. Say a family has five adult children and they all live at home. It is definitely better for property owners if all these people live in separate units.

Bumper Stickers

On my way to work I saw a bumper sticker that read "the problems we're facing right now will not be solved by the person and/or persons who created them." I instantly thought of our politicians and blamed them for our problems and agreed that yes - they caused the problems and yes - they would not be the ones to solve them.

But really think about this. It certainly is easy to blame everyone else for the problems when in reality, the problems have been caused by a combination of a lot of factors. We need to accept accountability and move forward and yes, I believe that even though we created the problems, we are capable of solving them. We need to stop blaming other people and just get it done.

Lessons We Can Learn From the Recession

As a homeowner are you worried about the value of your home? As an investor are you wondering how to know the best time to buy and the best time to sell? With recession still in the air and moving out slower then most people would have predicted, all property owners are pensive about the future.

I recently read an article on Inman News called "5 bright spots in real estate recession". While he refers to these trends as 'bright spots' I see it more as lessons for all property owners to take to heart and learn from.

1. People now buy for the long term.
Don't take a short-term view of the investment property you purchase or your primary residence. Keep your properties for a longer period of time then in the past.

2. Dysfunctional properties are being weeded out and creatively reused.Investors in real estate need to look at taking dysfunctional properties and turning them into something useful for the community.

3. American housing stock is getting an energy-efficient upgrade.
Instead of moving to a newer home check out upgrading your home with more energy efficient water heaters, doors and windows.

4. People are making more responsible mortgage decisions and building financial good habits in the process.
If you are in the market to purchase property plan ahead by saving money for a down payment , keep your credit good so that you have a good FICO score and can get the best loan. Once you do get your loan, read your loan documents carefully and use a REALTOR® to help you get the best price for the property and have someone knowledgeable on your side that's working for your best interest. Something you may not know, Landmark REALTORS® offer free buyer representation.

5. Our feelings about debt and equity have been reformed.
Don't refinance to pull out money to pay off other debts or buy other items you want. Let your equity in your home just build up, otherwise you will get caught up in overspending. Concentrate on paying your principal down to avoid being upside down on your mortgage.

If you have questions about purchasing or selling a property for your personal residence or for an investment call our knowledgeable REALTORS® at Landmark Group at 402.55.8111 and they can help you navigate through the process, or check out our website at http://landmarkomaha.com for more real estate information.

Media

How long can you go with out any media in your life? Are we addicted to mass media? Way back when before I was alive the only media was the newspaper and it didn’t come out every day or even twice a day, I would give everything to go back to that. I wish I could just resist, but I can’t, I am either looking at a website or watching the news. Lately I have been trying to figure out why we can’t resist the media, is the reason out of fear of what could happen? Or we need to know how things are currently going. Is the media really telling the whole story or leaving us hanging until we watch more or the end of the program. After watching the news especially, I have realized it is all negative. With all the negative information or TV shows we watch, I don’t think it is healthy. Probably the reason why American’s can’t get out of this funk and try to stabilize the economy, they are constantly surrounding themselves with negative thoughts. Everyone should think if this is really healthy and try to change their way of life, maybe it will help jump start the good ol’ days again.