Income Property Investing is Always Profitable if You Pay Attention

Your local market might change – scratch that – WILL change during your lifetime. The likelihood is high it will roll through several boom and bust cycles if you hang around long enough but that shouldn’t worry you because income property investing can always be profitable if you understand why the price is what it is and what you can do to make it work in your favor. Put simply, you must recognize and adjust to the current market.

Four years ago, most investors were looking at a completely different dynamic when purchasing property than today. You had to pay 80 cents on the dollar due to the fact that there simply wasn’t the glut of foreclosed property on the market like today. Competition among buyers was fierce but the good news was that, 30 days after buying a property, it had likely shot up another ten or twenty thousand dollars in value. Price appreciation was working hard in your favor. Four years ago, without the glut of rental properties on the market, potential renters were ready to jump on a deal when it came available. Any deal.

But today, my how the worm has turned. Chances are you’ll only have to pay 60 cents or less on the dollar to buy the property but there are so many available for rent that, even with a growing pool of renters, they can afford to be pickier about which place they lease, resulting in your property sitting vacant a matter of weeks or months.

Neither of these scenarios is the kiss of death to a smart income property investor. The kiss of death is to have no clue that it’s happening in front of your eyes. What’s the best way to make sure that you have a clue? Listen to your sellers and tenants. They’re in the trenches and know what’s going on. Never think you’re smarter than the market or can ignore the market. It will put you in your place fast. When your livelihood depends upon finding a renter and you’ve heard from a steady stream of prospectives that they like it…except it needs new carpet…hmm, what should you do? If you want to ever actually rent the place, put in new carpet!

The bottom line is that even if there is a recession raging all around, you don’t have to participate. Just keep on making money from whatever set of facts the market presents you.

The Bonus Commissions Team

Flickr / Berd