The consensus is almost deafening. This is the time to invest in real estate (RE), there's no doubt about that. But there are four questions that you must be able to answer before choosing your strategy and plunging into the icy waters of today's real estate markets:
What to buy?
Where to buy?
What strategies are working best in today's markets?
What role does real estate marketing play in growing profits and safeguarding by RE business?
Baby Boomers Dominate Free and Clear Markets
Right now, one of my favorite strategies is high-equity free and clear RE investing. These properties have little to no mortgage debt and, with the right real estate marketing and evidence-based decision-making, the sky is the limit for savvy real estate investors.
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Homeowners Seeking Stability, Cash Flow
It's no secret that Baby Boomers (or those born during the post-WWII baby boom that took place in the United States from the mid 1940s through the mid 1960s), not only make up one of the largest segments of the U.S. population, the also comprise a huge group of homeowners with high equity and relatively low mortgage debt.
In many cases, these folks also are grappling with job shortages, woefully under-funded Social Security and Medicare systems, soaring insurance costs and diminishing values on what's been for many their largest nest egg: the homes they've worked most of their lives to acquire, finally free and clear of mortgage debt but often suffering from years of deferred maintenance.
Asset Ownership vs. Liquidity
According to the U.S. Census Bureau, there are approximately 24 million free and clear homeowners in the United States. Forbes magazine reports that a growing number of these homeowners are feeling the pressure of tightening credit markets and a languishing
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Analysts already are predicting that the number homes listed for resale will skyrocket over the next decade. And once they're sold, fewer sellers are likely to reinvest in housing markets, even for downsized dwellings. A growing number of them will seek rental housing.
These shifting patterns in income and homeownership are likely to have a dramatic impact on the demand for rental housing, especially that which is deemed "affordable" in virtually any given RE market.
Trendspotting in Current Research
This trend also is likely to gain momentum based on the fact that during the RE boom, a huge proportion of rental housing disappeared from that market as more homes were sold as primary residences, many of which have gone into foreclosure.
According to Harvard University's Joint Center for Housing, the latest trend to hit the U.S. housing market is the search for affordable rental units. In 2007, completions of multifamily dwellings for rent fell to 169,000 units-just two-thirds of the 2002 inventory and only one-third of the record high reported in