Real Estate 101: Don't let the desperation fool you

Real Estate 101: Don’t let the desperation fool you

Today's Financial News - Posted September 26, 2008

The real estate crash may be the perfect time to enter the property markets. But don’t think every property is a bargain. It’s not, even in this market. And you should learn how to tell the difference.

by Stephanie Grimmett

Baltimore — (TFN): Every crisis holds an opportunity. And property is no different.

You may never have considered jumping into the property pool before, but, looking at the current soggy prices for real estate, you could be wondering if this is the right time to test the waters.

But be careful. You may be able smell desperation wafting out of the doors of your local Remax office, but even in the smorgasbord of the current real estate market, you still have to be selective in your investments.

Don’t be the idiot who grabs the first property he lays eyes on, expecting to double his price in the next five years.

Not every deal is really a deal. And getting a contact high from your realtor doesn’t count as independent research. Do your own homework.

Learn how to determine the value and potential of a property for yourself. Take into account the economic future for the neighborhood. Study the specific market you’re stepping into. And do the math for yourself.

I know calculating mortgage rates and price-per-square-foot probably isn’t your idea of fun. But, while market appreciation may yield a small profit for you, having the right mortgage on the right property in the right place can exponentially increase your returns.

Want more specifics on first-time real estate investing? Justin Ford of Early to Rise just published an excellent article that outlines all of the numbers and factors to take into account when buying a new property, whether it’s your next family home or an apartment building across town. You can find his insight here. I think you’ll find it very helpful.

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