Investing on a house a good IDEA.?

Question

I have 2 properties, was thinking of buying my 3rd, or should i stop, and hold on to the 2 I have. Scared about whats going on, in the market. House are not selling like they use to.

PLEASE FILL ME IN.

Answer 1

It really depends on the economy, doesn't it?

Everybody keeps hoping for a "soft landing," but there have only been one or two in the last 40 years.

All recessions that have occurred since 1970 followed periods in which the Fed was actively tightening money. And all tightening cycles except two have produced a recession within at least two years after they ended.

The two exceptions took place in 1983-84 and 1994-95. They were called "soft landings," because the economy slowed enough to dampen inflation, yet not so much that growth disappeared altogether causing a jump in joblessness.

But these considerations aside, there was plenty of pain during these soft landings, as well as during the more widely recognized hard landings. This is because a number of collapses and bankruptcies occurred in the wake of each tightening cycle.

What follows are some of the better known crises and the years in which they occurred:

-- Penn Central went bankrupt in 1970;
-- Franklin National Bank went bankrupt in 1974;
-- The Farm Belt and Latin American Debt crisis in 1982;
-- Drysdale Securities and Penn Square Bank collapsed in 1983;
-- Continental Illinois Bank went bankrupt in 1984;
-- Stock market crashed in 1987;
-- Savings & Loan crisis/real estate collapse/junk bond crisis in 1990;
-- Mexican Peso crisis/Orange County went bankrupt in 1994;
-- Asian currency crisis/Long Term Capital Management/Russian default in 1997;
-- Internet/telecom/ bubbles burst in 2000;
-- Stocks collapsed into worst bear market since the Great Depression in 2000.

For 2006, we have a number of events to choose from, starting with the bursting of the real estate bubble. Two other industries with problems that could evolve into something worse are autos and airlines. And, of course, something completely unexpected could arise -- as it has many times before.

The message: whether the economy experiences a hard landing or a soft landing as a result of the current round of Fed rate hikes, it will most likely be only the tip of the iceberg.

Answer 2

If you have 2 properties already (I assume you mean income producing properties), you are familiar with the whys and the wherefores. You know how much income they will produce so you should know how much you can invest to get the roi you expect.

There is every likelyhood that housing prices will come down some more, so the question is invest now or sit and wait for a better opportunity. If the bubble really pops, not an unlikely scenario, the banks will be stuck with a ton of housed they will be begging to unload. If you have the capital when the opportunity arises, you will be in a very favorable position.

Answer 3

depends on your objective.

are you buying them to fix up and flip or is it a long term investment? Also depends on which part of the country you are living in.

If the market is headed down I'd say wait. hold the two you have and wait about a year. Then go steal one or two more and hold them for about three to five years and then dump them all.

here in Phoenix they don't expect the market to head up again until 2008,

Answer 4

I would wait to see how the market is. When you feel like properties are selling, then go for it. But you should wait as housing is expensive at the moment.

Answer 5

It is hard to lose money long term in real estate if you buy right. Just ride the market, it will come back up. Just be careful with renters.