Where to Invest Your Money during Recession: Real Estate

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When you heard about real estate investing in today’s recession, the majority would react by saying, “avoid at all cost.”

The sub-prime mortgages, the sky-high interest rates, and the sharp decline in value – all seem against real estate investing.

However, I encourage you to have a surfer’s mindset that I have occasionally mentioned in my previous posts.

The surfer mindset

Surfer loves challenges. In fact, challenges are what make a surfer perform.

For example, in a surfing competition, weak tides can be a huge, single, factor that will fail the surfer to win the competition. The stronger the tides, the more challenging they will become and the better the surfers showcase their surfing skills.

However, take heed – if your surfing skills are somewhat low, strong tides will swallow you; The key is utilising the right skill sets on the right opportunities.

In your personal finance, you need to increase your financial knowledge in order to ride the right waves, with the right skill sets. Playing too safe will hinder you from achieving the financial milestones you have set. Exposing yourself to risks too much will put you into financial difficulties, even personal bankruptcy.

One of the waves in today’s tide of recession: real estate investing

Real estate is one of the hardest hit sector that causes property owners and brokers alike struggling financially.

If you thought about investing in real estate during recession, it wouldn’t be the right decision to invest your money.

Or, is it?

Many real estates are losing their value – how can they be a good place to invest your money?

Robert Kiyosaki, the best seller writer of Rich Dad Poor Dad series, stated controversially that a house is not an asset, because it is not putting money in your pocket.

General public and many experts are slamming him for such controversial statement, but his statement proves true in today’s recession.

Homes are losing value, the interest rates are high, and the demand is low – the dreaded sub-prime mortgage.

However, as everything in life, there is always a good thing in every bad thing.

Today is probably the best time to invest in real estate, for one reason: Higher mortgage interest rate = Lower real estate demand = lower price tag.

As the real estate business crashes, property prices are in decline, too. Foreclosures are everywhere – this means, opportunities are everywhere, at a discounted price tag. Of course, your eyes for real estate values and prospects play an important role.

One last advice: never invest in real estate with an expectation that your property’s value will go up – it’s not always the case. Instead, invest with cash flow comes first in mind – your property as a rental property.

Image by terren in Virginia.

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Tags: butterfly effect, chaos theory, real estate, recession, subprime mortgage

8 Responses to “Where to Invest Your Money during Recession: Real Estate”

1. rawdawgbuffalo says:

   January 2, 2009 at 7:21 pm

   well i wonder if Detroit is an indication of things to come maybe a depression nipping at our nose.

2. Ivan says:

   January 3, 2009 at 3:09 am

   Hi,

   Could be… unless you know what to do to take the opportunities 😉

3. Melvin Goldstein says:

   March 17, 2009 at 9:57 pm

   When I see the non-linearity in the Economic World as:
   Oil down 70% but not demand.

   Unemployment 8% but sales down way in excess of 8%.

   In Physics a non-linear system is the subject of Chaos Theory – a Physics Foible.

4. Loan Mods says:

   April 11, 2009 at 7:11 am

   I have read a few of your posts and they are all interesting and informative…keep up the good work.

5. investment news says:

   September 18, 2009 at 7:56 am

   Yes, real estate investment ois the best investment that you can make. During the recession, the prices of real estate will come down, so you will be able to buy better and more real estate with your money. After some time, the value of the real estate will increase and it keeps on increasing all the time. Best investment.

6. Dress Pants %0B says:

   December 21, 2010 at 10:32 am

   real estate is the most lucrative business, any man can make a fortune in real estate business .;:

7. Property Investment Guide says:

   April 10, 2011 at 9:44 am

   An excellent site full of useful information. I am just finishing work on my property investment guide site and I will keep calling back to get help and hopefully pass on some helpful hints and tips.

8. Kenyetta Loock says:

   December 13, 2011 at 12:02 pm

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