Making Riches Investing in property is possilbe in this Economy

Many so called experts claim they know how to make big money in property investment. Many have lost their fortunes in the attempt. In today’s wild and crazy real estate market, it is still possible to make money with investment property. Caution is the key word.

Very recently, it was possible to buy property with little or zero down, horrible credit scores and with no documentation required. The result of this mis-management eventually led to the banking crises. Investors and speculators ran rampantly, which led to dramatic changes in banking and the mortgage industry. Today, banks require 20% down and excellent credit scores. Appraisers and banks have become extremely cautious resulting in a complex mortgage market.

There are several ways to develop an investment strategy. If the intent is to buy low, then flip the property, the conditions are extraordinarily complex. The market value of housing is still falling as are the opportunities for a quick sale. Chances are that any home bought for that purpose will remain unsold for several months. Be prepared to make the mortgage and tax payments for as long it takes to sell it.

The better choice today is to buy at a bargain prices for the rental market. There has been an epidemic of foreclosures and short sales. Properties are purchased at well below retail value and converted to rentals. The rental business is booming due to large numbers of people who need to live somewhere after their homes have been foreclosed upon.

To be a participant in property investment, there are essential steps to take. Financing is critical. Clean up your credit report before you begin your venture. Consider converting some of your personal investments into working capital. Join forces with an experienced investor who would partner with you and help jump start your efforts. Talk to banks and other financial enterprises about obtaining funds. Don’t forget family for a source.

Find a realtor who specializes in your area and understands investment property. He can be invaluable in locating exactly the kind of properties you should look for and can provide the legwork to obtain valuable information and even help with property management decisions.

Go slowly at first until you are confident enough to go it alone. Make certain that a reserve is set aside to handle eventualities and repairs. A six month payment buffer is a place to start. Property investment should be a long-term program that will allow you to live eventually on just passive income.