Predicting that the Real Estate market has to cool off at some point (perhaps when foreigners stop seeing such good echange rates), Money Magazine has some interesting tips on how to plan for future real estate investments and how to time the market.
One thing you should do is start networking with small local banks because:
If a slowdown develops and banks start foreclosing, the smaller ones are likely to end up holding title to homes directly. Believe me, landlording is not a business these guys want to be in. They’ll sell their foreclosed properties as quickly as possible to a responsible owner.
There is also advice on how to track the real estate market by paying attnetion to how long it’s taking homes to sell, home builders throwing in freebies in an effort to sell new homes, and tracking real estate in neighborhoods you like. When you finally get a deal through your friends at the bank on a foreclosed home, be patient:
It’s highly unlikely that home prices will permanently fall off a cliff, Pets.com-style. But real estate markets that go down have been known to stay down for years. Ask anyone who owned a home in Texas in the late 1980s, or Southern California in the early 1990s.
So don’t bid on a property unless you are prepared to be the landlord for at least five years. Because you might have to be.
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