The Real Estate Bubble-When Will it Burst?

More and more individuals are realizing that real estate is much safer, and a better return on investment than many traditional investment vehicles. Unlike stocks or bonds, real estate investments can usually be liquidated in order for the investor to access funds in far less time. Additionally, unlike many other investment vehicles, real estate does not come with the stiff penalties associated with early withdrawal. In most cases, investors can liquidate and not have to worry about losing large sums of money. Finally, real estate provides the assurance of a higher yield of return than other types of investment.

On average, real estate appreciates about 4% per year. That means that a property you purchased five years ago, under normal circumstances with no significant wear and tear, would be worth at least 20% more than the amount you paid for it five years ago. Some real estate markets perform significantly better than others at given times and with a mild remodeling or upgrade you could be looking at substantially higher returns on your investment.

Given these facts, it's no wonder so many people are jumping on the real estate investment band wagon. It begs the question however; when will the real estate bubble burst?

There has been some speculation that the wild investment in the real estate market and they hype of outrageous investment returns has no where to go but crashing back down to Earth. After all; how is possible that real estate investments could possibly continue to double as they have in the last few years? Some critics even point to the fall of the real estate market in Japan in the late 1980's. Homes that were worth thousands of dollars are now only worth a fraction of that amount while the homeowners still owe almost the entire full amount of the first mortgage.

While diversity is always a good idea and placing all of your investment funds in one vehicle, such as real estate, is never a good idea; there is reason to believe that the real estate bubble in the US is not about to end any time soon. This is true for a wide variety of reasons. First, simply supply and demand. Mark Twain once suggested investing in real estate because as he intimated, they simply aren't making any more of it. What we have is all we have and when there is a strong enough demand; it can be quite valuable. Individuals and families are looking for safe, secure and affordable housing; however there is a dangerous shortage of this commodity. This is the primary reasons why flipping real estate has become almost a national hobby. It pays and it pays well.

Under ideal circumstances, an investor can purchase a property with financing from the credit union, provide a model renovation and then resell the property with a return of around 15-20% on their investment. This may occur anywhere between 3-6 months from the initial purchase date. Not bad. Professional investors have also learned how to tap into the huge profit potential of foreclosed homes, which they able to be purchased for under market value and then flipped for an even larger profit.

As with any type of investment, one of the keys to investing in real estate is in understanding when to sell. Holding a piece of property is rarely in the financial best interest of the investor. Some investors have found that a mixed strategy of holding and selling works well to provide income returns; however the best strategy in real estate investment remains flipping on short term projects to maximize profit potentials and reduce risks.

Nicole Soltau is the President and Founder of CreditUnionRate.com.
The Leading Credit Union Directory.
Search, Find, Join.
http://CreditUnionRate.com

---

Why Canadian Real Estate is Such Good Value

Real estate agents, Canadian citizens and foreign investors interested in... Read More

10 Things You Shouldnt Do When Youre Buying a Home

Home Buying Don'tsYour home buying process is well underway. The... Read More

Home Selection Checklist - A Good Aid When Choosing a Home

This home selection checklist is a tool to help you... Read More

How to Attract Clients in Residential Real Estate

Doesn't it seem like everyone you know has a friend,... Read More

Walnut Creek Real Estate

Looking to relocate to a Californian suburb with a low... Read More

Important Facts For Home Buyers

If you are considering buying a home or have spent... Read More

What We Do To Sell Your Property!

Once you have contracted us to sell your property we... Read More

The UK has Gone Property TV Show Crazy!

The UK has gone property TV crazy. There are now... Read More

Moldy Homes are a Great Investment

Have you seen this in your classifieds? -"Will pay $$$... Read More

Vacation Homes Are Becoming A Reality For More Homeowners

Whether it's a lakefront cottage or a log cabin in... Read More

Preparing for a Showing

As soon as you decide to put your home on... Read More

Real Estate Investing - Books,TV Infomercials, and Seminars

Real estate investing has become popularized today because of real... Read More

11 Different Ways to Participate in The New Millennium Real State Boom

Many parts of the country are going through a real... Read More

Log Homes - What is the Log-Home Lifestyle?

Typical log home company advertisements in popular log home magazines... Read More

Are You Trying to Hit a Home Run With Your Prospects Without Asking Them on a Date?

Real Estate email marketingDo you remember the old School girl/boy... Read More

Home Appraisal Values Are Critical

To most, owning a home is a necessity, but sometimes... Read More

FSBO: For Sale By Owners Chapter One

She reached the phone on its second ring. "This is... Read More

Young Couple Buys Ranch with Government Money

Kirk and Tina Sczepanik had a dream. They wanted a... Read More

Investment Real Estate Secret: Buy a House Today, With No Money Down

If you've read my article "Purchasing Property With No Money... Read More

What Is Home Staging And How Does It Help To Sell My House

Home staging is the concept of preparing a house for... Read More

How to Buy Your Own Home

Buying Your First HomeBuying Your Own Home isn't nearly as... Read More

Best Time to Buy? Best Time to Sell?

When is the best time to buy? When is the... Read More

Miami Property Booming for Foreign Investors

Miami tourism is growing and so is the Miami property... Read More

Why Invest In Property?

Why property, some people ask when looking for an investment.... Read More

Home Inspectors - Negotiating a Lower Price

To help you negotiate a fair sale price for a... Read More

Advantages and Disadvantages to Selling a House on Your Own

As with any business transaction, there are pros and cons... Read More

Cant Rent a Work Zone

So you've picked up your first (or third, or tenth)... Read More

If Your House Is a Mess, You Dont Have To Sell For Less

Don't be tempted by "We Buy Houses" or "Sell Your... Read More

New Homes in Ridgefield

Location:Frequent travelers will absolutely delight in this town! As part... Read More

Do You Need to Download a Landlord Inventory On-Line Today?

Do you need to download a Landlord Inventory on-line now?... Read More

Budgeting Your Log Home: Where Do You Start?

The Log home industry has matured these last many years,... Read More

Popping The Real Estate Bubble Myth!

If you turn on the TV, listen to the radio,... Read More

5 Things to Look for in a Property Appraiser

Homeowners who are seeking a property appraiser often ask "How... Read More