Thinking About an Investment Proprty (again)

I’m always on the lookout for a deal. For years I had looked for investment properties, but could find none that made any sense, given the massive appreciation on real estate the last few years- rent would never have been able to cover even 70% of my mortgage. But now, the prices have come down, and I think I need to seriously consider purchasing something else again.

The softening real estate market has scared off a lot of would-be investors. On one level that makes sense, but if you really think about it, it makes no sense whatsoever. Consider this:

When ketchup is at market price or maybe even seems to be high, you probably only buy exactly what you need. When it goes on sale, you probably (or at least want to) buy the ketchup in a higher quantity because you are getting it on discount. This of course relies on the assumption that the price will eventually rise back to normal levels, and, if history is any indication, house values will again begin to rise.

It is certainly strange that we seem to be programmed to only buy equities when they are rising in price. I’m not hearing “get into the stock market now.” All I hear is about people worrying about if they should get out. The same applies for real estate, and as a result, home sales are down and less people are improving their homes (but, that in turn keeps prices low and creates good deals for thrifty people like us).

If anyone else has recently purchased a second home or investment property or is thinking about it, I’d love to read your thoughts.