I think this is exceptionally good advice from Craig King at RealBlogging.com:
No matter what you’re selling, conventional wisdom is that the FUD Factor (fear, uncertainty and doubt) tends to freeze buyers in their tracks. Purchases get delayed. Decisions take longer. Buyers follow the maxim, “When in doubt, don’t.”
At the moment, you’d think the “FUD Factor” would be a big cloud over the real estate market. Israel and Hezbollah have broken out into open warfare, and the conflict could broaden throughout the Middle East. Oil prices are skyrocketing, and supply is all but certain. Iran and North Korea are rattling nuclear sabers. And back home, we’re enduring a drought and bracing for a new hurricane season.
In short, I think it’s a great time to be buying — and selling — real estate. Real property has always been an investment haven in troubled times, and I believe it will play that role in the months ahead. Interest rates are still extremely low by any sane historical standard, and the Fed appears to be through with its tightening for a while. Volatility of stock prices has a lot of investors worn down and impatient with mediocre or negative returns. It may not happen overnight, but in times like this, people “return to the land.”
If we do a good job of telling our story, I think prospects will realize it’s a time to buy, not a time to stall.
There’s more to this, though. I spent 16 months racing around with investors while they bought everything that didn’t move, all the while wondering why they couldn’t find any bargains. Duh! Everyone else was buying at the same time, and no one was selling. Now the situation is reversed, a lot of sellers but buyers are thin on the ground. It’s counter-contrarianism, a carefully thought-out strategy of running with the herd.
Take a look at the cost break-downs on our investments page for Phoenix-area rental homes. Those are rigorous numbers, no blue-sky fantasies, but they still hold. It’s easy to get a 1,200sf home that will perform that well, and — for now at least — 1,500sf is not out of reach. And rents in the Phoenix metropolitan area are going up.
Fear, uncertainty and doubt, meet true contrarian greed. Owning residential rental properties is not a quick-kill strategy. It never was, despite what you read in the newspapers. But the Valley of the Sun will house 8 million people by 2040, possibly before. They’re going to need a place to live, and, at least for now, bargains abound…
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