Since 2007 and the burst of the housing bubble, one of the toughest industries to make money in was real estate. Many people lost incredible amounts of equity and found themselves deep in debt for a property that wasn’t worth what they paid for it anymore. The sudden loss of huge amounts of wealth for the middle class stopped the housing industry and real estate from being a good place to invest your money. Traditionally, real estate has been one of the safest investments you can make. It’s a great way to make a long term investment in your future and build a portfolio of stable income generating properties for investors. The Seattle housing market is no exception to this and over the last few years, thanks to the strong rebound in Washington’s robust economy. The tech industry is expanding in Seattle when in most other markets, businesses were closing down.
Over the last few months, there have been several very strong indications in many markets that a recovery has begun. In many of these markets, savvy investors can find amazing deals on rental properties and places to invest your money. Seattle investors who are looking to make a move into creating channels for passive income can make find some great deals that can mean great profits for you.
Las Vegas
Las Vegas was one of the hardest hit by the housing bust. When you have an economy based on people’s disposable income, it’s very easy for the wheels to come off when a recession hits. This particular recession hit Las Vegas the hardest as many projects (including several casinos that were about to be built), were cancelled due to lack of funding. Apartments, houses, retail space – no one was left unscathed in Las Vegas.
But as quickly as the money disappeared in Las Vegas, it’s beginning to return. There is still a glut of inventory on the market, but the market has bottomed out there and savvy investors who are looking for good long term investments to flip or create rental income from can pick up a lot of amazing deals that can lead to big money later on down the road in five to ten years from now. Las Vegas also has learned the lessons of depending on tourist dollars as their sole source of income and has diversified their economy greatly including health care, biotech and publishing.
Phoenix
Another city that was hit hard by the recession, Phoenix suffered from an overabundance of inventory and a high unemployment rate. That unemployment rate fell to 7.1% last month, so you can expect this market to begin to heat up in the next few months as people become more confident with their financial situation and begin to think about buying a house again. In the meantime, savvy Seattle investors can pick up rental properties to create a passive source of income for those people in Phoenix who aren’t quite ready to buy a house yet.
Memphis
Memphis was a great buy soma pills online europe example of the problems with the housing crisis. It looks like Memphis still might have a little way to go before the prices truly bottom out, but it’s close – waiting for the market to completely bottom out might make you miss out on great opportunities right now on places that might become highly profitable in a year or two. Memphis is still the fourth lowest performing housing market, so that means that prices are still falling. Memphis has a strong economy, but their unemployment rate still stands at 9.4%, so Seattle investors may want to look into rental properties as a way to recover their investment. People aren’t quite ready to buy a house in Memphis, but, they still need somewhere to live and rental properties are a great way to supplement your income.
St. Louis
Low prices and low mortgage rates make St. Louis one of the most attractive markets for Seattle investors to look into as a place to put their money. July of last year saw an increase of 25% for home sales year over year in the metro St. Louis area. St. Louis’s housing market hasn’t just hit bottom, it’s already in the middle of a strong bounce back meaning it’s a great idea to get in on St. Louis Real estate now for a quick turnaround on your investment. The St. Louis corridor’s median price for a single family home was $213,000 still fairly flat since 2011, but these low prices are making the St. Louis market very attractive to investors and much of the extra inventory is being snatched up. St. Louis is a great market for those investors who are looking to make a decent return over the next two or three years in flipping their house. St. Louis’s unemployment rate is still a fairly high 8.8%, but the strong market recovery indicates an undercurrent of recovery that hasn’t quite surfaced in the lagging indicator of unemployment.
The Seattle housing market still has some great opportunities for investors to make some money – however, the incredible opportunities available in other markets like St. Louis, Memphis, Phoenix and Las Vegas offer investors opportunities for higher cash flow potential and better returns on you initial investment. As it is with many other things in life, research is key. Be prepared to visit the markets and check out the properties in person, whatever small amount you may spend on your research will pay back huge dividends when you find the right place. If you buy the wrong place that has a lot of problems that you need to work on, that investment can quickly turn into a money pit that even Tom Hanks and Shelley Duval can’t save.
The housing market is a great way for investors to make investments for their retirement or create a source of passive income that you see every month. There are many opportunities out there, it’s up to you to find them!
Tom Cullen says
f you are located out of state, don’t make the mistake I did and become a “remote” landlord in Memphis, or anywhere else.
It’s been a nightmare. Three evictions, three property managers, appliances stolen by tenants when they move…etc. The latest? A Memphis agent/property manager takes $3500 in option money on a lease purchase of a property I own. Money legally belonging to me if tenant/buyer violates agreement or doesn’t purchase within the option period. Tenant buyer violates agreement, agent lets them get away with it. I fire agent, and evict tenant buyer. $3500 option money is withheld by this agent. I get absolutely NO final accounting, no keys returned. On April 4th of this year (last Thursday) the tenant buyers sues the agent in court and actually wins!
You get taken advantage of as an out of state investor. You have no control. Your fate is determined by agents, property managers, lawyers, deadbeat tenants all the way across the country! in the meantime, the people promoting out of state investments have made their money up front.
Seattle Real Estate Investing says
Hi Tom,
Did you buy the property yourself, or were you working with a company?
Tom Cullen says
On the positive side, you CAN make money in out-of-state real estate. Just not as a “landlord”. I ended up funding a LOCAL investor in Charlotte NC, who buys and flips foreclosures. Took me awhile to find him. To date, I’ve made 15% ROI, tax deferred in a self directed IRA. I’ve done both loans and joint ventures with him. I also have another investor in Indiana. The key is to work with the FEW you can trust and who do what they say they are going to do. A good local investor really values a reliable source of funding for their projects. OTOH, there are others, like tenants, that don’t pay, and offer nothing but excuses.