residential real estate
- Residential

Investing in Residential Real Estate

This is the inverse of homeowners who have been unable to make their mortgage payments due to the recession. Many people with the skills and resources have been able to profit from the situation by residential real estate investment. For many people throughout history, real estate has been one of the finest avenues for accumulating wealth. In the United States, more millionaires have been made via real estate investing than through any other business.

Since the start of the crisis in 2007, real estate investors have grabbed the chance to invest in residential real estate at discounts of up to 50% off market value across the United States. You might wonder how these prices are determined. When the crisis hit, several businesses cut their workforce in big numbers, causing a domino effect in the market. After a few months of unemployment, many homeowners stopped paying their monthly mortgage payments. Banks and mortgage firms found themselves with large sums of late mortgage payments on their hands at the same time, which they couldn’t handle. In order to address this issue, mortgage firms and banks began sending letters of default to homeowners in an attempt to convince them to resume paying on their debts.

This effort failed, and on top of that, some mortgages that were originated several years prior to the recession had interest rate adjustments built-in to the mortgage that automatically increased homeowners’ monthly mortgage payments by $1,000 or more per month, resulting in more troubled mortgage payments as homeowners were unable to pay the increased payments on their homes. This came dangerously close to bringing the US financial system to a halt, something that hadn’t happened since the Great Depression of the 1930s.

residential real estate investment

As a result of banks and mortgage companies carrying out their usual operations of foreclosing on delinquent homeowners, a significant supply of properties was produced at an inopportune moment for the real estate market as a whole.

With an uncertain housing market, real estate values that had grown from 2003 to 2007 plummeted practically suddenly. New homeowners were afraid to risk being caught up in the devalued real estate market. This is where you’ll find residential property investment options. During the housing boom of 2003-2007, many of these people bought and repaired homes and made a lot of money in the process.

As a result, they were flush with cash and ready to take advantage of the market’s decline. The US government’s bank regulations required banks to sell this overstock of properties in order to remove these failed loans off their books, thus they had no choice but to sell them. As the only true buyer in the market, banks began selling off inventory to residential real estate speculators at steep discounts. These investors, in turn, performed renovations to the properties, and as the months passed, some potential buyers learned that reduced prices were available in the market, and they chose to take a chance on home ownership.

Residential real estate investment companies began offering these new homeowners discounts of up to 50% on houses that they had acquired from banks. The new homeowners were overjoyed because they were able to purchase homes for far less than they could have a year before, and now they were getting new upgraded amenities that the real estate investor had thrown in, such as new stainless steel appliances, upgraded cabinetry, freshly painted property throughout the home, and new flooring that had been used to entice the homeowner to purchase.

The residential real estate investing component of the market continues to pour money into the market to buy additional bank-owned houses at reduced prices. They were making a killing, with earnings ranging from $200,000 to $300,000 per unit depending on where the house was located in the nation. This was beneficial to the investors in residential real estate. This tendency continues to this day, although banks who discovered how much money these investors were making changed the manner they sold the houses.

Profits are still plentiful, although not as plentiful as they were in the early years of 2008 through 2010. When word got out about how much money was being made in the resale residential real estate market for distressed real estate homes prior to the recession, additional investors joined the club, many of whom had never been in the real estate industry before. If you’ve ever considered earning money outside of your present job, there are still ways to do it, sometimes without using any of your own money or credit.

The big sums of money may no longer be available, but what’s wrong with making an extra $20,000 to $50,000 from the sale of a single property? Without having to leave your existing work, two or three property sales each year can put an extra $60,000 to $150,000 in your pocket over and above your current income. As a result, the residential real estate investment industry is thriving in 2013.