I know many of my readers are real estate investors, just like me, and here’s a little encouragement for you…

First, I’m going to state much of this as hypothetical. Please assume that nothing I say is true or my opinion, but rather hypothetical, things that may or may not be true, and decide for yourself what makes sense and what doesn’t.

The real estate market in the United States is down. This means that this is a great time for investors, because now is when we can buy near the bottom. The number of investors has been reduced, so there is less competition. The current real estate recession is likely to end this year, or next year at the latest, and here are some of the reasons… The average length of a recession is only ten months. The current recession in the real estate market is enough for a price correction. Various economic stimuli have been put in place that will help jump-start our economy and real estate… The stimulus includes the income tax exemption checks currently being sent to Americans, interest rates are reduced to its lowest levels, the Federal Reserve demonstrating its willingness to support banks and financial institutions, and the expansion of our money supply. These stimuli will get real estate and the economy moving again, and it’s just a matter of how long until that happens.

Many feel that the real estate market is already improving a bit.

A bottom has to come at some point, and wouldn’t you rather be buying into the bottom than hide your head in the sand because the declining market scared you away from real estate? You can be dollar cost average if you buy when we head into the bottom, buy into the bottom, and buy when we exit the bottom. To be fair, I don’t think we’ll ever see the kind of crazy appreciation we saw before the market turned around (things definitely got overheated), but let’s look at some of the long-term benefits of real estate… Done right, you get a positive monthly cash flow after all expenses. If you do your homework, you can have significant equity every time you buy (try it with stocks!). You should get equity built up as your underlying mortgages are paid off (basically, your tenants buy the properties for you). In the long term, your properties will appreciate again. It’s easy to apply leverage in real estate. And finally, you get several tax advantages compared to alternative investment options. Taken together, these benefits make real estate an incredible investment option for those who know what they’re doing.

Well, that’s my pep talk for today. As always, use your common sense and buyer beware; you are responsible for your own action and results. I don’t have a crystal ball and I don’t know the future, but I make educated guesses and act accordingly. I’m not saying run out and buy all the real estate you can get your hands on. However, I believe that thoughtful, well-planned, long-term buy-and-hold real estate investments that fit your lifestyle and personal goals can produce very good results. Most wealthy people in the United States became or remain wealthy, keeping much of their wealth in real estate. Why do you think that is??? Best wishes and happy investing!

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