Forget home builder stocks and don’t even think about jumping on the gold bandwagon; not when so many housing markets around the country are reaching what most of us would say is a likely “bottom area.” Some real estate analysts maintain their bearish outlook on the economy and think the blood is still too fresh in the water to buy real estate but these are the self-appointed experts who haven’t yet figured out that there isn’t a national housing market.
Would any thinking human being say southern California real estate is the same as Minnesota and the same as Texas and the same as Florida? The answer to that is, of course, yes, there are many ignorant real estate experts who don’t understand that, unlike the stock market, real estate is local – VERY local. Having said that, it’s not necessary for the blood to have dried in the streets before you step in to buy real estate for income through rentals. Actually, the places we suggest you buy have been chugging along fine through the entire economic mess. Yes, there have been ebbs and flows, as there always are but these are solid markets that have been strong for a while.
Looking at homes in the Sun Belt, where prices have already crashed by 50% or more, what difference is another 10% going to make? Picking the exact market bottom has always been an imprecise science, so why bother? When your strategy is proven and the deal is right, pull the trigger. Places like Florida, California, Arizona, and Nevada have been beaten up pretty soundly but there’s something intrinsic in our DNA that always pulls us towards the sun, you can bet on that. Prices will rebound in time, like they always do, and you could be sitting fat and sassy as the owner of a portfolio of rental houses bought at bargain bin rates.
Keep in mind not to put all your properties in one area. That doesn’t make sense and goes against everything Jason Hartman has taught for years. Rather than three income properties in Orlando, buy real estate in Orlando, Texas, and Indianapolis. The likelihood of all three of these disparate markets disappearing down the porcelain throne all at once are not high. This is how to diversify real estate holdings.
The Creating Wealth Team