Deciding to start buying investment real property in the current depression is a tricky decision. Much of the information being given out is mis-leading.The real question is when to buy investment property.

The simple fact is that real estate prices have not reached bottom yet and a decision needs to be made as to whether an investment home is for a quick profit by flipping the properties, or as a long-term investment that will provide incomes. In many parts of the world, valuations are more appealing for the buyer interested in long-term income, but not so much for the investor wishing to make a easy and quick capital gain, especially in the short term.

There is no counter indications that real estate prices still have a way to change, and the direction is downwards. There may be a few places, especially in the US, where prices have reached bottom, but these will tend to be in markets where there is a huge amount of inventory of real estate owned property, like Nevada – massive stock of bank owned properties.

Timing is crucial, when buying investment properties because there are some markets that may never recover, and some markets that have already begun recovery. There are substantial differences between the most boom-fueled markets and those that saw slower, more sustainable growth during the credit boom. Those most likely to recover first are the ones that were least affected by the boom. Those most likely to recover last will be the ones where artificial inflation created massive increases in house prices over the last twenty years or so.

A great deal of effort is being put into re-inflating the housing bubble by the financial institutions aided by the central banks. The British government for example has printed several hundred billion in new money in an effort to prevent a market correction and so far had failed to achieve their goal.

US foreclosures are still going up, despite enormous efforts by the government and central bank. But the enormous quantity of bank owned property continues to rise, and more Americans lose their homes every day. The fact that they cannot afford them points to some serious mistakes having been made at governmental level by encouraging runaway lending to un credit worthy individuals.

Where this will end is anybody’s guess, but currently, deciding to begin investing in homeswhich requires careful consideration before doing so. There is substantial money to be made if the correct market is chosen, and due diligence done before investing.

At the other end of the problem are those wishing to raise financing in an extremely down market. The banks are just not lending and arranging investment property loans is extremely difficult without a strong track record. The value of such properties is difficult to assess with the present low sales volumes, and any median price figures need to be examined closely to determine the level of sales volumes before making a decision.

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