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Now before you think I’m absolutely crazy for saying something like that, since basically 85% of my net worth is in real estate…and I make most of my money as a real estate agent…so I definitely see myself as being pretty reliant on real estate for my income, just hear me out, because I promise this should hopefully make sense.
I think one of the biggest concerns right now for most people is fairly surface level..they don’t want to lose money short term, and they’d rather just wait and see what happens. And I don’t disagree, this is a fair argument. But this ignores some other important aspects.
For me, I don’t flip properties. In fact, I never intend on ever selling them – I keep them on low-interest, fixed rate mortgages for 30 years and I rent them out. Rent covers all my expenses and spits out some extra profit each month. I don’t plan on selling, so the properties value doesn’t really make a big difference. Instead, I care what the home is worth 30 years from now.
Here’s what happens, and it’s happening RIGHT NOW. People are reading about the real estate market softening and because of that, they don’t want to buy now – instead, they want to wait for prices to drop even further, then buy in at the bottom. All those people who are sitting on the sidelines are doing what…they’re RENTING. All those people out priced from the market? They’re RENTING. Those sellers which sell their rental properties? That’s one less property on the market to rent.
The one thing that does historically well in a real estate drop is…rentals. Rentals are making the money. So either way, from the way I see it, I win. I’m either getting a really strong rental market, which means more money in my pocket, or rising values…which means money in my pocket. So why would I care if my place is worth 5% less next year if that just means there are more tenants looking for rentals, which helps drive that market higher?
In the bigger scope of things, unless you’re flipping real estate….which I personally don’t recommend, and I have a video about why I don’t flip real estate…timing the market is a gamble. You might get it right sometimes, you might get it wrong sometimes. I’ve seen more people get it wrong than get it right, however. If you can’t find a good deal, don’t buy…trust me, you can over pay for a property in a really bad market, and you can under pay for a property in a great market. Your individual skillset will prove much more profitable than the market dictates.
Invest what you can afford, live below your means, buy properties that cash flow, buy them on a fixed rate long term loan so there are no surprises about your payments fluctuating, and wait. If you find a deal, go for it…if you don’t, then wait. Simple as that. No sense over complicating anything.
For business inquiries or paid one-on-one real estate investing/real estate agent consulting or coaching, you can reach me at GrahamStephanBusiness@gmail.com
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