Best Real Estate Investments in Today's Economy

Best Real Estate Investments in Today's Economy

The Best Real Estate Investments in today's market are those investments that will yield the best chance of a short term profit or a long term gain.

Real estate markets are going through a unique situation in history: after a rapid increase, which started at the end of the 1990s and topped around 2006, and saw house prices rising by as much as 70% more than inflation, creating an estimated $8 Trillion real estate "bubble," they rapidly declined and house prices dropped sharply, due to the mortgage financial turmoil, which started with the collapse of the subprime loans.

Updated Figures and Trends in the Last Quarter of 2010

As we approach the end of 2010, we have seen mortgage rates dropping to a record low since the 1950s. New and existing home sales have fallen, inventories of unsold homes have risen (including REO or bank Real Estate Owned,) construction has slowed down and foreclosures have risen again.

As far as the Federal Government involvement in all this, the Obama administration's HAMP, which was supposed to help nearly 4 million struggling borrowers with mortgage modifications has not lived up to expectations. Only 1 in 6 borrowers has actually been accepted in the HAMP.

What does this all mean for a Real Estate Investor?

These present times can provide to a sharp and creative real estate investor unique and best real estate investment opportunities. The investor just needs to approach the marketplace in new way.

Profits can still be made in short term real estate investments, as reselling or flipping properties acquired via short sales or REO. The inventory of these homes is abundant and there is a large base of wholesale buyers looking to purchase these properties for rental income in a "Buy and Hold" strategy. Therefore you have short term investors, who make money by selling to long term investors, who hold properties for building a portfolio.

Other best real estate investments are in commercial real estate, which has actually only in the last year or so started to feel the pain of the economy, but it now provides great investment opportunities, and minor investment niches, like self storage units (the downsizing of homeowners and businesses has created an increase demand) and roadside motels, which had been abandoned for several years, but are now finding new life as boarding houses or small apartments.

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