Property Values and where to invest now? - Posted by Peter
Posted by Peter on June 06, 2004 at 20:05:56:
Everyday on mainstream sites and periodicals we see talk about real estate, where its going, the next hot market, why california cannot sustain anywhere near the growth it has seen.
Now, for most of us, we are limited to our backyard, and lets say you are in a flat market, you are not able to take part in what cali has seen. Even people buying somewhat modest price homes 4 years ago at 250k 300k are close to millionaires in some parts of cali due to appreciation.
I realize you make money when you buy, etc, favorable terms, but you will never come close to those returns to flat or average markets. In hot markets, people who have no idea what they are doing in real estate are making a killing while us in average markets work hard to get deals.
This being said, is it worth the extra risk to buy in other “hot” markets or markets you see coming up, as opposed to buying in your hometown for example rural arkansas? Owning property 1000 miles away and hoping to take part in the massive appreciation.
To me, the risk makes sense, you diversify markets, you may not be there, but get a good prop manager you can trust, you may not cash flow much or maybe not at all, but a 17% annual appreciation will blow away that 3% in a few years if you sold.
I would like some thoughts on this and if you have ideas for markets that will outperform the average.