| The comments below are quoted from a
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| | retailing or flipping for cash was the
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| recent speech by Ben Bernanke, a member
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| | hot ticket, due to high demand for
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| of the Federal Reserve Board of
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| | housing and the ability to sell
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| Governors..."Looking forward, I am sure
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| | properties quickly. In recessionary
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| that the Committee will continue to watch
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| | times, higher interest rates and lower
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| the oil
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| | housing sales fuel more seller financing,
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| situation carefully. However, future
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| | and rental properties flourish. Of course
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| monetary-policy choices will not be
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| | there are always exceptions to the rule,
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| closely linked to the behavior of oil
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| | but generally speaking this is the
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| prices per se. Rather, they will depend
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| | case.As interest rates got lower, rates
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| on what the incoming data, taken as a
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| | of return for traditional investment
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| whole, say about prospects for inflation
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| | vehicles went lower and lower. The
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| and the strength
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| | result? More and more money poured into
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| of the expansion. Generally, I expect
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| | real estate lending.
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| those data to suggest that the removal of
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| | Hard money and other types of
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| policy accommodation can proceed at a
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| | conventional real estate financing
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| 'measured' pace. However, as always, the
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| | programs expanded drastically, making
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| actual course
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| | millions of dollars in new funds
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| of policy will depend on the evidence,
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| | available for real estate investors.As
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| including, of course, what we learn about
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| | housing sales reached record levels, home
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| how oil prices are affecting the
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| | sellers began seeing a boom in housing
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| economy."In short, the Federal Reserve
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| | prices. It has truly been a sellers
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| knows that there will be an impact. But
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| | market since rates fell below 7%. What
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| no one knows how big and how fast. During
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| | happened to
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| the oil embargo of the 1970's gasoline
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| | investment property? During the past 5
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| prices doubled several times over a
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| | years of an investing bonanza in
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| matter of months. The effect was dramatic
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| | Atlanta,GA prices for investment
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| and sudden. It was difficult to adjust,
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| | properties have doubled and even tripled.
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| because things were happening so
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| | 3 bedroom 1 bath junkers were selling in
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| fast.This time around, it appears that
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| | 1999 for as little as $25,000, even in
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| the price climb will be gradual and
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| | liveable condition. Today, that same type
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| steady, thus allowing the Federal Reserve
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| | house regularly sells for $65,000 (or
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| and the government to make adjustments as
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| | more) before repairs.Going Forward:Rising
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| they go, by examining economic data on a
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| | rates will have a positive effect for
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| monthly basis. At least that is what they
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| | investors, by slowing housing sales even
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| are hoping for.
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| | further. As sellers get fewer solid
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| They know that the economic climate is
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| | offers property prices will get softer.
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| changing, but they are hoping that it
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| | Rising rates could fuel more short
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| will be slow enough to control.This week
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| | selling of foreclosed properties, and
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| as I contemplated my own reaction to the
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| | this trend is likely developing
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| changing economic environment, I felt
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| | now.Foreclosures may eventually get to
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| compelled to encourage you to give some
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| | levels not seen since the late 1980's,
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| serious consideration to your personal
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| | due to high levels of mortgage debt among
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| economic circumstances. If you have a
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| | homeowners, who in many cases, have
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| large percentage of debt relative to your
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| | mortgaged all of their equity to pay
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| income, you should take steps now to
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| | other bills.If rates get above 7%, you
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| eliminate as much of it as possible.
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| | can dust off your creative financing
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| Prepare yourself so that you will be
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| | books, as seller financing will increase.
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| protected against unexpected economic
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| | Rising rates mean rising monthly
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| upheaval.Being debt free, or having a
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| | payments. This will eliminate the
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| very low debt to income ratio is the best
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| | borderline buyers from the housing
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| way to protect yourself in an
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| | market. They will start moving back
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| unpredictable and volatile world. As we
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| | into apartments and rental houses.
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| learned on September 11, 2001
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| | Vacancies will decline, rental rates will
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| things can change dramatically in only a
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| | increase.If rental rates increase, cash
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| few hours. If you put it off, you may not
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| | flows will increase. Rental property will
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| have enough time to get it done.The
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| | be back in style with investors who
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| average person needs 4 to 5 years to pay
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| | abandoned rentals and focused on selling
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| off their
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| | for fast cash in a hot market.Companies
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| outstanding personal debt, not counting
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| | that sell investment property can expect
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| their home. In today's world, it will pay
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| | growing demand for rental grade
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| to get started now. I have made it my
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| | properties. While it is still very early
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| primary objective to pay off my personal
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| | in the cycle, I believe this shift is
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| debt over
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| | already under way.Economic recessions are
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| the next year or two.If you currently
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| | boom times for smart investors who are
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| own rental properties, be sure you have
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| | positioned to take advantage of the
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| cash reserves for future emergencies.But
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| | situation. I am not predicting a
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| how might all this economic stuff affect
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| | recession per se' but rising oil prices
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| real estate investing?The interesting
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| | and interest rates will eventually have
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| thing about real estate investing is that
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| | a big effect on housing.Be ready to take
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| even bad economic conditions tend to have
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| | advantage when the opportunity comes.
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| a silver lining. There is a cause and
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| | You have plenty of time to plan for it
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| effect relationship at work in any
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| | now.Donna Robinson is a real estate
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| given economy, whether it is considered
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| | investor, author and consultant in
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| a "bad" or "good" economy.In good times,
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| | Atlanta, GA.
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| such as we've had the past 8 years,
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