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That is the question we are all asking today. Why? Because of the many market investors who speculated in real estate, the difficulties surrounding sub-prime loans with the resulting foreclosures and bank failures, and falling home prices.

 

If the late Dr. David Schumacher, my mentor for the past 10 years and author of the now-famous book, The Buy and Hold Strategies of Real estate, were still around, I know what he would say because he said it over the past economic downturn in 1990-1995. He would tell us not to worry. This is only temporary and perhaps the normal cycle of real estate.

 

It creates bargains that can benefit you. This cycle has been happening since Montgomery Ward began offering homes for $1, 500 through its online catalogs. As sure as the sun rises and the conditions come and go, real estate will make those who own it rich over a period of time. He would add that now is the best time to get great deals in real estate.

 

The real Residence Cycle

Real estate is still the best investment possible. It always has and always will do well in the long run.

 

This is the fourth real estate cycle I have been through and none of the downturns were fun Ruchira Park East. However, if you have patience and look at the long term, your real estate can be up in value more than any other investment. Do not treat real estate as you might treat the market, worrying about the ups and down.

 

Since 1929, real estate has gone up an average of five percent a year; if you stay away from the obvious non-appreciating areas like Detroit, it is more like seven percent a year. At that rate, properties will double in value over 10 years with compounding. Add a federal tax benefit of 28 percent plus state tax write offs, the wear and tear write-off for rental property, and the eventual pay-down of the loan and you have a strategy rich people have always used to accumulate wealth.

 

Over the past 30 years I have saw many flippers who buy, fix up, and sell. I are not aware of many who have much net worth or are wealthy because of flipping. It is merely a very risky way to make money.

 

Those who have prospered are the ones who are in it for the long haul and patiently watch their properties increase in value over time. This past economic downturn appeared by speculators who all switched at the same time, putting too many properties on the market for sale and rental. I guarantee that over the long haul, you will always regret selling any property you have every owned.

 

Since time passes by anyway, the buy-and-hold strategy is a great way to become rich. Dr. Schumacher experienced at least five real estate menstrual cycles and did very well, acquiring an eventual net worth of over $50 million.

 

You just can't go wrong in purchasing an inexpensive rental, townhouse, or single-family home in a good location where there are jobs. Make sure you have a fixed-rate loan, make sure it cash flows, sustain it for 10 to 20 years, and you have a property that has doubled or even quadrupled in value. When you need to cease working, simply join in a cash-out refinance to live on as well as to supplement your retirement pension check.