Real Estate Investing All-in-One For Dummies by unknow

Author:unknow
Language: eng
Format: epub
ISBN: 9781394152896
Publisher: Wiley
Published: 2022-11-23T00:00:00+00:00

Adjusting for market conditions

Shooting for a 20 percent profit in real estate is like trying to hit a moving target: Housing values in your area may be going up, going down, or holding steady. To give yourself a better chance of hitting the 20 percent mark, adjust the percentage to your market conditions:

20 percent in a market where homes values are rising

25 percent in a market where home values are steady

30 percent or more in a market where home values are declining

This doesn’t mean you’ll make 10 percent more in a declining market than in a rising market; it means that you set your goal 10 percent higher in a declining market so that you can hit your target of making a 20 percent profit. In other words, you figure in more of a profit buffer when property values are falling.

Don’t even think of buying into an area where the market is in a steep decline and shows no signs of recovering. Wait for the market to bottom out and exhibit signs of improvement before you dive in.

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