Eight Ways to Make Money in Real Estate
IS THERE A HOUSING BUBBLE? WHO CARES! HERE'S HOW TO CASH IN NO MATTER WHERE THE MARKET GOES.
(Business 2.0) – There's only one thing we know for certain about real estate these days: Home prices across the country have shot up faster than at any time since reliable records began tracking them in the 1890s--a national average of an inflation-adjusted 52 percent since 1997. That's scarily similar to the stock market's bubble years, 1997 to 2000, when the S&P 500 index rose a bit more than 60 percent.
Well this bubble's about to blow, too, insist the Chicken Littles, who point out that interest rates are rising, homeowners are mortgaged to the hilt, inventories are growing, and, in some regions, soaring prices have pushed houses out of the reach of many. Brace yourself for a crash.
Not only is it not about to blow, it isn't even a bubble, counter the Pollyannas. Home prices jumped just as sharply in the decade during and after World War II, they reason, and that didn't cause the sky to fall. Besides, the last time the real estate market cratered, in the early 1990s, the Fed was lowering interest rates, not raising them. Factor in demand from immigrants and baby boomers buying second homes, and you'll understand why there's nowhere for real estate prices to go but up.
So who's right? No one knows--yet. But that doesn't mean you need to stand by helplessly, especially if you have an entrepreneurial streak. Plenty of people have figured out how to make money in real estate, whichever way the market moves. We found eight of the most innovative players on both sides of the bubble question, and got them to share their strategies. We think you'll find their answers much smarter than mere bubble babble.