Real estate investing has always been considered a safe investing plan. Unless you were a “sucker” looking to purchase swampland in Florida, real estate investing was considered a winning strategy because barring unusual events the equity of a home would generally increase. But, the current subprime mortgage crisis has seriously impacted the current real estate investing landscape. However, this impact may actually be good for some people.
Some may wonder if the subprime mortgage fiasco has had a massive negative effect on the real estate investment market. Well, it would be foolish to assume that all the bad publicity generated by the subprime mortgage crisis has had a ripple effect on real estate investing. The prices of houses have fallen dramatically and loans have proven harder to secure. However, this can be considered a blessing as opposed to a negative.
First, let’s get something straight right off the bat: people are still buying and selling real estate. Yes, the subprime mortgage crisis has had a dramatic impact but it has not had such an impact that it has ended real estate transactions all together. So, as long as the real estate market has not completely collapsed and buying/selling real estate has become a thing of the past, you can always find an avenue for earning income in real estate. Barring something along the lines of the Bolshevik Revolution where the government seizes all land you will still have real estate investment options available. Therein, lay the key here: real estate prices will invariably rise in the future. If you are able to weather the storm until it reverses course you will be able to come out of the depreciation problem the subprime mortgage crisis created.
Here is a fact: if you currently do not have a subprime mortgage, and do not have a property that is being foreclosed upon, then you are not feeling the brunt of the crisis. If the equity of you home has fallen because of the ripple effect of the crisis but it is still more than what you paid for it, then you still are ahead of the game. In fact, when the real estate market eventually makes a comeback you will probably regain some if not all of your lost equity. In fact, you may even discover your equity increasing again depending on how much time passes. Patience here is the true key to success.
Additionally, you could even use the current subprime mortgage crisis to your advantage in the sense that this is currently a buyer’s market. This can give you the option of buying real estate in short sales, foreclosures or through other avenues which would provide a cheaper acquisition price. If you are able to purchase these homes on fair fixed interest rates, and not with interest only mortgages, no down payment loans and other such nonsense, you probably will avoid a host of problems that the subprime crisis has yielded. In a way, you could even airlift an old worn out cliché and apply it to this situation: “one door closes and another door opens.”