When is the right time to start investing in property again?

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It is hard to believe that it is 6 years since the fateful housing crash in late 2007. In early 2006 house prices were at an all time high, it was easy to get huge mortgages to buy pretty much any house you desired (within reason) and investors were building up large portfolio’s that were earning them a plush living. Fast forward 6 months and in late 2006, early 2007 house prices began to fall leading to in 2008 the world being in the firm grasp of the worst housing crash in history.  A large amount of families then lost their homes, banks went bust, repossessions were happening all over the place and the whole economy in general was in a mess. Fast forward to 2009 when the government tried to invest $700 billion into loans for housing to stimulate the economy again and you’ll see that the rate of repossessions was still going up by 14% at the time. In 2011 banks repossessed over 800,000 in the United States and high levels of unemployment mean that it is becoming increasingly hard for people to get back on the property ladder again.

So where does that leave us now? Well, housing prices continued to fall in 2012 but appear to have bottomed out somewhat meaning that it could be the right time to invest again. The good thing about housing is that the prices WILL come back up again, it is only a matter of time, the hard thing is guessing how long that time will be and whether you can afford to have all of your assets tied up like that, if you need money quickly housing is the worst possible place to get it out of. If you do have money now then the advice would be to invest, try and get a few houses because there are so many options once you have them to make money that it would be crazy not to, most people just tend not to do the obvious.

The worst thing you can do, especially in this economy, is to buy a house and just leave it to appreciate in value. The whole buy a house, do it up and then sell it strategy doesn’t work anymore; there simply isn’t the profit margin to make it worth the risk. What you want to do is rent it out, so many families have lost their homes in recent years and all of those families will now be renting accommodation instead. If you can get a fixed tenant for a few years then they are effectively paying you mortgage repayments every month plus a little extra. You also have the added bonus that they may wish to buy it from you if they stay there for a while and when they get back on their feet and are able to get a mortgage.

I have recently bought a property myself and use some letting agents Cambridge to manage it for me. I got a mortgage to buy the property and have rented it out. By the time I have got the rent, paid the fee to the letting agents and paid the mortgage on it there isn’t any money left but I am slowly but surely buying my own property without having to lift a finger. If you have decent credit then it is a guaranteed money maker, the property will be worth 3x what it is now in 7-10 years time.

Image courtesy of Danilo Rizzuti / FreeDigitalPhotos.net

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