Why Real Estate Appreciation is Not Your Friend

The only saying about buying real estate investment property that we hear more than “Location, location, location, is that real estate always goes up in value in the long run. After all, “They’re not making any more land.”
This, although true in most cases, does NOT mean that your best strategy is to buy and hold property until Country Homes For Sale Near Me it goes up in value. In fact, I don’t believe you should be dependent on real estate appreciating at all.
The reason is that if you rely on appreciation to make a profit, what will happen to you if prices don’t go up? You make nothing, or could even lose money if values go down. Just the closing costs you pay to buy a property would make you upside-down as soon as you’ve bought it, not to mention the closing costs you’ll have when you sell it.
The solution, then, is to buy in such a way that you do not have to rely on appreciation to make money. In other words, create a rule that you will only buy properties far below market value. I wouldn’t buy any property for more than 80% of what it could sell for in great condition, minus any repair costs you may have.
Right now, I can hear some people who are reading this complaining and griping already. “But no one will sell you their house for less than it’s worth! They’d have to be crazy!” I promise you that not only can it be done, it should be done.
In every location and in every real estate market, there are sellers who just want to get rid of their house, even at a loss. Perhaps you know someone who has been in that situation. It happens all the time. If you get good at finding these property owners, you won’t have to worry about real estate appreciation and can receive your profit from either selling right away, or buying and holding for the long run.
If you follow this rule, you will be far more likely to create Real Estate Agent Pay Structure large profits in real estate, both now and in the future.

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