Real Estate Investing For The Long haul.

By Doc Schmyz

The real estate market has dropped out. Prices are falling around your ears. So does this mean that you should get out of property investing? No this is actually a great opportunity to increase your portfolio. When you are buy real estate it does not really matter where the market is, unless you are considering selling in the short term. If you are holding long term then you have to accept the market fluctuations if you can buy during a low period of a cycle that is the "golden hour" in real estate...but sometimes it is hard to find that hour on your watch.

If the market is experiencing a major downturn it is a great time to be buying due to a vast number of bargains. You can buy at rock bottom prices. However, do not get too negatively geared because this is how most investors get themselves into trouble in the first place. Go for positive gearing. In other words make sure your rental income equals or exceeds your outgoing expenses, to include mortgage payments. If you have other income you may be able to stand an extra $100 or more per month to top up the mortgage but try to avoid it. Negative gearing is ok if you have a really good income and a tax problem.

Ok we all know that in a strong market, when the prices are going up, our property value also climbs. However now, in a slower and declining market you need to change your focus to hold for a longer period. We are looking at a few years before a more friendly market for investors shows up on the horizon.

Meanwhile, concentrate on positive gearing and steadily increasing returns. This is a long term game and always has been. Look at property investing from a business perspective and do the sums before you buy. You need a decent return on investment and you need the rental return to cover or nearly cover the mortgage expenditure.

Having said all that, we cannot avoid the fact that with good research and due diligence the depressed market presents investors with the GREAT opportunities to build a portfolio of properties for long term gains. - 23309

About the Author:

Doc Schmyz has worked with investors all over the US. He built a free free website shares Real estate investing information for all over the US. Findreal estate information by state

Saving: Bad For Our Economy?

By Jennifer McClelland

Saving money is a wonderful thing. It gives banks money to invest, it gives the average person money to invest, money is thrown into markets that would not have otherwise seen those dollars, and the list goes on. Unfortunately, the economy we live in is driven by consumer spending.

Money circulates even further, creating jobs and supporting industry, if spending rises or stays static.

The savings speed, which used to be reflected by unenthusiastic numbers, has risen all the way to 5.7% in April. (Here's a suggestion: If savings rates were once in negative levels, we were spending more than the money we earned.) In a time when what we really need is expenditures, that is when Americans have made the decision that we are going to save. That is so astoundingly backward. Let's spend when we actually need to save and let's save when we certainly need to spend.

The economic challenges we are currently facing were somewhat produced by the large amount of individual and government expenditures, financial irresponsibility, and elevated debt. Sadly, personal expenditures, not government expenditures, mind you, on a small scale from a enormous array of consumers, is really one of the best repairs for the economic challenges we are in right now. The humorous thing is that most Americans had the idea they were previously saving. They thought a lot of what they were spending was considered saving: home improvements to raise home value, real estate purchases, and much more, expecting these were all investments, with the hope of a positive return. This was further fueled by even higher home values and a corresponding "wealth effect". Investors felt the same way about the stock market. Investments in the bank were low, creating falling CD and saving account interest rates. It was rational, however, due to a much less return from banks than other investments. "What drove the savings rate down was stock cost appreciation and housing appreciation. People spent on those because they thought it was like saving," claimed J.P. Morgan Chase economist Bruce Kasman.

The belief that investing is saving was obviously wrong, because it helped lead to the downgrading of banks, helping to cause this calamity. The proper saving is always good for a booming economy. However, right now, no saving is beneficial for the economy. No one had been saving before, so saving now is the right mode of revival. Spending, which is growing, will actually be one of the most helpful economic revival actions the downturn has seen. When the economy has recovered, all the indexes are solid, and joblessness is not so pitiful, feel free to save again the right way. - 23309

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