Staying Current in Real Estate Investing

If you keep reading about how housing prices are plunging like never before, you're probably a little unsure of whether you should try the home market now. But we are entering now, what in America, is the unofficial real estate peak season - May and June. If you feel tempted to try the market with a home purchase or sale, you should probably think twice before rushing in if it's been a while since your last foray out there. A lot has changed over the past three years ever since the housing crisis hit. You need to make sure that you understand how the market is today, and play by the new rules. Here's what you need to keep yourself aware of getting into real estate investing.

Today, home values keep falling in a way you probably never saw happen a few years ago. Some people instinctively try to wait as long as they can so that they can catch the market when it has hit bottom. Now it would be very difficult for anyone to time these things correctly. If you wait too long, you could end up buying when the market is on rebound. And anyway, the price of a house isn't the only thing you need to worry about when you're buying. You also need to think about what the interest rates will be like. Wait any longer this year and you're likely to see interest rates rise. To not wait then would be a great idea.

A few years ago, the rule for real estate investing was that you needed to go as far as spend a third of your monthly gross income on repaying your home loan. You needed to buy that great a house. People have realized since then though that stretching themselves to the limit to buy a house can be risky. They can end up with a great house but be quite poor in everyday finances. These days, experts favor something like 20% for real estate investing. But what is right for you really depends on everything else that goes on in your life.

The closer to the action you buy a house (which would have to be close to downtown), the more it was thought you had a chance of making a killing on your real estate investing. These days though, people far prefer the suburbs to the city. There are better schools, there are better parks and the cost of living is lower. Still, when the housing collapse occurred, people found that the closer to the city their homes were, the less their homes lost value. So that particular rule still holds.

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