The residential real estate market has pretty much bottomed out and has created a domino effect on the rest of the economy. Look for a full blow recession soon as when the real estate market collapses, so does the rest of the economy.
This does not mean that you should not be investing in real estate. Real estate is always a viable investment. A real estate recession is an excuse to buy low and hold on tight until the market rebounds. The real estate market has taken a nosedive before. This is not the first time. To know more about the property market cycle, click here
Real estate is a good investment for many different reasons. One of them is that the market, like the stock market, fluctuates. It does crash, like the stock market, but then rallies. The stock market is known to have bull and bear markets. Right now, the real estate market is experiencing a bear market. It will turn to a bull market later. You just have to be patient.
Another good reason for investing in real estate is the fact that it is a tangible asset. You can use real estate. It is not just a piece of paper but a real live thing. You can even live on the property or let others live there. You can build in the property if you are investing in a vacant land. Owning property is always a good thing. Think about the people who once owned property in what is now Bangsar. Those who held onto their property made a killing. Those who sold quickly did not make as much money. Real estate should always be looked at as a long term investment.
Property prices are relatively low right now as it is a buyer’s market. For low property prices, I am referring to sub-sale market. And yes, there are of course many properties in the primary market that are low too but not significant. The chances for you to get a good deal in secondary market are higher to compare with primary market. Not to mentioned if the property is in a matured area and could fetch a good rental. The smart thing to do is to buy property now and hold on tight. Look for the long term investment. Instead of looking at your real estate investment as you are going to the racetrack, look at it as your retirement plan. Those who were making quick money flipping real estate were essentially gambling on real estate. Some of them won big. Many more lost their shirts. Sure you can take chances, but you are better off to have a safe investment as well. Make sure that the real estate that you buy is diverse. You can purchase some properties in blighted areas if you think they are going to rebound, but you should also have properties in areas that are stable and secure.
The best part about owning real estate is that you have something that everyone needs. We all need a place to live. You can usually sell your real estate investment and make a profit if you are smart enough to hold onto it until the market becomes a bull market.