Realty411 Magazine Featuring Scott Meyers | Page 18
INVESTING
Real Estate Investing:
A Market Correction is Coming
By Gary Massari
I
t’s inevitable. A market
correction is coming. The
market has been on a high
for years now. In 2018
alone, the Dow Jones Industrial
Average broke a record high 15
times. If history has taught us
anything, it’s that the market
cannot sustain those highs for that
long without a correction. Real
estate markets across the country
are still very hot. Even with the
“cooling” that some markets are
seeing, real estate prices are still
well above records and
competition is hot. “A cooldown
has been predicted for over in a
year in our local market. However,
I’ve yet to see it. Sure there are
some longer list times for sellers
but properties are still selling in
record time over asking price.
It’s still a hot market,” says Eric
Jones, Director of Sales and
Marketing for Freedom Real Estate
Group.
With all that being said, the
question on every wise investor’s
mind: how can I prepare myself for
the next recession? The short
answer, diversify. The long answer,
diversify into buy and hold, long
term strategies.
“The shortgame (fix and flip) is
good. It’s instant return. But you
get hit hard by the tax man. Buy
and hold has some of the best tax
advantages of any asset class,”
Jones stated. “Depreciation,
property taxes, mortgage insurance
and more are all deductible
expenses. Plus, with fix and flips,
it’s simply not a longterm strategy.
It’s not a way to build true wealth.”
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To lessen the risk of any big
swing in the market, the answer is
to diversify your investment
portfolio so all your eggs aren’t in
one basket. The problem many
individuals faced in 2008 was that
most of their 401k or other retirement
accounts were tied up in stocks and
mutual funds. When the market
tanked, so did their accounts. Now
imagine if half of those funds were
diversified into buy and hold real
estate. For many, the outcome
could have been vastly different.
Here’s why.
.