Wednesday, January 13, 2010

The Commercial Real Estate Crash

Commercial real estate is in big trouble for a variety of different reasons.

1. More businesses are going online to save on overhead costs (No rent payments, electric bills, employee costs, etc) so they can pass the savings on to the customer.

2. Due to the economy, small businesses are failing and closing shop.

3. Also, people are a little more scared to try a new business venture with the economy being in the condition that it's in.

In my opinion, vacant land isn't such a hot investment, either. It just sits there and eats up tax expenses.

Right now, the best thing to buy is income producing properties, such as apartment complexes, mobile home parks, and senior citizen centers. Right now, the baby boomers are retiring, and there is a tremendous shortage of retirement homes / assisted living centers for senior citizens.

Also, due to all the foreclosures, the apartment business is flourishing in this economy. Remember, people always gotta have a place to live. And if they aren't home owners, they have to be renters!

Everyone is predicting doom and gloom in this economy, but when sales are low - rentals are high, and when rentals are low, sales are high. Real estate is not a luxury item, it is a necessity.

But anytime you are purchasing a piece of property, make sure it has potential in three different ways:

1. Buy low (in this economy, you can command a 50% discount if you pay with cash)

2. Buy in an appreciating area (So not only do you have a property you bought for a steal, but make sure it will also increase in value over the years. Go back 10 years for market trends)

3. Buy income producing property (Good old fashioned residual income. This will cover your taxes, insurance and also put some money in your pocket month after month)

If you have this triad, you will be a very successful real estate investor and will be on the path to financial freedom. And don't settle for anything less than ALL THREE benefits of investing in real estate. Don't just do it for appreciation, or tax write offs. Buy it for the three reasons I listed above, and you will be ahead of 90% of the so called real estate investors out there.

Call or text Rose Wilkinson @ 405-881-5958

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