Can you make money in a downtrend?

[TheBacon]

A brief discussion where share trends were mentioned (http://www.somersoft.com/forums/showthread.php?s=&threadid=10230) led me to 2 questions...

1. Can you make money in real estate in a down trend?

i.e. when the price of property is declining (as opposed to not rising quickly)?

2. How?



TheBacon.

 

[RPI]

Renovate

 

[bundy1964]

Morgagee in possetion sales.

Picking near the bottom and holding for the long term.

bundy

 

[Steve Navra]

Buy SHARES

 

[jackerouac64]

In a down trend theres heaps to be made as I think all would be at basement bargain prices like foreclosures I guess. If you are talking about the property that you own then thats when you gotta look at the long term approach of property. maybe renovate and then sell on to the next buyer. What do others think? I'd see this as a very important question at the moment, what with the flood of Investment property buyers that are around now.

 

[Tibor]

Explore new ideas like wrapping, renovate, subdivide and build (cost will be lower), buy shares (cheers Steve), and cash up for eventually arising bargains, when the heard moves on and the over commited called to cough up..

Tibor

 

[bbg2003]

Forget about shares, keep investing in real estate!

There are many opportunities out there if you look enough.

Leave rapping to black americans they're good at it.
No point renovating either.
Remember it's the land content that goes up, why waste good money on the building?

bbg2003

 

[Robert]

You always make more money by negotiating harder in a down turned market...

Then the added benefits of reno'ing, wrapping, developing are compounded even more so.

It always amazes me why people don't negotiate hard when they are buying property. Remember, they want what you have.... YOUR CASH..... And they only have one property amoungst many in the market.

Robert

 

[Puppeteer]

In a down trend you could always use your income to retire debt to turn -ve cashflow properties into +ve cashflow. Not only will you be generating weekly income, but you will be aquiring equity for when the market hits the bottom and you can snap up some bargins.

 

[Bill.L]

Hi all,

Lets see if the situation of low interest rates, low inflation, declining property prices and a sharemarket risen of a recent low has occurred recently. My memory says Japan during the early 90's.
Now, how would you make money in that environment??

Easy, Short sell shares!!

I prefer puppeteer's solution and hope we don't go Japan's way.

bye

 

[D.T.]

Hi Puppeteer,

Instead of pouring money into your loans, wouldnt an offset be a better alternative? This way, you can both increase your cashflow (since the offset will reduce your interest), and also have money fairly-easily available when theres bargains to choose from.

-Just my 2c

Dave

 

[Puppeteer]

Hi Dave,

Yeah, an offset would be better, but the point is, instead of buying more depreciating assets, use your income to retire debt and make the depreciating assets profitable. Exactly how you do this will depend very much upon your individual loan and property structure.