| www.FinancialSurvivalNetwork.com presents:
Dr. Marc Faber(Gloom Boom and Doom Report) thinks real estate in extremely depressed markets may be a good buy. And he may be right, but he could be wrong and the markets could decline further. Yes markets in Florida, Phoenix and Vegas have declined by as much as 75% since the economic collapse began in 2007. However, that doesn’t mean these markets can’t decline even further. If you see a house in a boarded up subdivision, and it’s selling for next to nothing, that doesn’t make it a good buy. We propose several means of valuing a property that you’re considering the purchase of. 1)Is the house selling for 3 times or less than the average income of that neighborhood? That’s a traditional valuation that became obsolete during the housing boom, but has seen a revival. 2)Is it cheaper to own than it is to rent, before the tax benefit? This is becoming more and more prevalent in especially hard hit areas of the country. 3)Can you realize a positive cash flow on a home bought for investment or a multi-family property? As Robert Kiyosaki says, an asset is something that returns a cashflow. A liability is something a costs you money. And of course don’t forget that pot of government subsidized mortgage money. Artificially low rates and minimal down payments could make a real estate purchase very attractive. But be selective, don’t settle for anything less than you want. After all, you’re a buyer in the mother of all buyer’s markets. Go to www.FinancialSurvivalNetwork.com for the latest info on the Economy, Markets and Precious Metals. |
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