Would you invest in real estate in this market?

[kozachka]

I have not done any research yet but reading the news and talking to people makes me wonder if this would be a good time to invest in real estate vs. stock market or holding funds in a high interest (am currently living in an emerging country) saving account. Ideally, we would like to buy in a place where we would like to eventually retire but that has good rental market. Our real estate management person told us that in San Diego area where we have property already the rental market is still strong and there are some bargins to be head in terms of buying as people can't get credit.

What do you think?

[JTsMom]

To use as a rental? Sure! IMO, now is the time for that. A lot of people can not buy due to financial problems, and have no choice but to rent. It's definitely a buyer's market, so you can find a great deal.

At some point, property values will go back up, but it's not going to be for a while, so I'd have to be really confident that I wouldn't need to sell for quite a while.

[KBecks]

I'm not a real estate investor and I'm shy about that kind of thing. We own our home and I have no desire to do the work of owning a rental property. But if you are an experienced landlord already, then I think it makes sense to take a look at what's out there. I would look at your overall portfolio so you have balance b/w property and other investments. I don't know what % is reasonable but it's something to consider, especially as you can't get out of property so easily

[brittone2]

I think it depends on how much money you have and what kinds of risks you can handle (your timeline, your other assets, etc.)

There was a short NPR segment yesterday and I think the general suggestion was that something like a REIT might not be a terrible idea right now, but buying individual properties, 2nd homes, etc. is more risky. Some people are in a situation where they are diversified enough and can handle that risk due to financial circumstances. I think it just depends on your overall financial picture and how quickly you'll need your money, etc.

[LexyLou]

Without a doubt. Now is the time to invest, as long as you have the time to sit on the property until the market rebounds. You'll make a pretty penny if you can buy now and rent it out.

I wish we had the cash to put down on a rental property right now.

[kijip]

There was a short NPR segment yesterday and I think the general suggestion was that something like a REIT might not be a terrible idea right now, but buying individual properties, 2nd homes, etc. is more risky.

In addition to my own finances, I manage/oversee significant funds for my work. The REITs we were gifted at my work have paid off big time for us for about 2 years, however, you need to be careful. Some are rapidly becoming worthless.

[brittone2]

I would agree Katie. I think their point was that a REIT can be a little more diversified within real estate (potentially) than putting all of your eggs into a single property as a landlord or a 2nd home. You'd obviously have to really look into any REIT you'd be interested in. I would consider buying rental properties only if I had a lot of other assets to balance out the real estate investment and had enough cushion to absorb potential losses and ride out the storm.

I'm not an expert in investing, just giving my personal opinion.

[KBecks]

And there are REIT stocks and REIT mutual funds available. Personally, I like index funds because I don't have as much time to research all the possibilities.
I think REITS are a great way of including real estate in a portfolio, if that's what you want to do. Of course any investment will require research and planning.

[bubbaray]

If I were living in the US, no I would not invest in real estate unless I had a LOT of liquid assets (as in, a year's savings, in cash somewhere) and a VERY secure job. I would be worried about ending up without a job or liquid assets in (what appears to be from the outside looking in) a very unstable economy.

Living outside the US, assuming your finances are pretty stable, I think there are many places where housing can be had at firesale prices. However, CA (and WA) are not such places, from my research. Personally, if I were going to do it, I'd buy somewhere where the prices were a lot lower than CA.

What about purchasing in the EU?? There is always a market to rent out long-term vacation villas in Provence, for example.

[BeachBum]

I wouldn't be opposed to buying in this market. But, I think you really need to know your market. I would feel far more comfortable buying a rental here where I live and have a good handle on value than I would elsewhere.

In my market there is a glut of rental housing b/c so many are stuck with second homes they need to rent out, or 2 mortgages, or houses that didn't flip. I also know the sweet spot for rental prices in my area. Something nice enough that I would want to retire to would be too expensive for most renters. (Assuming that you want to cover your 80/20 mortgage payment).

I think it's a great time to shop--just know what you are getting into.