Mymiamiblog

Think back to just a few years ago when the real estate market was booming, and talk at most watering holes centered around someones real estate investment and how much money they made on their venture.  Waiters, homemakers, doctors, and lawyers were all jumping on the investing wagon.  Today unfortunately many of those same “investors” are struggling to hold on to multiple properties or have chosen to sell at a loss or worse just walk away  never looking back.  One of the key factors that many of these investors forgot about was to: “buy low and sell high.”  Now I am not saying that if you bought during the peak of the market you made a mistake; many people also made lots and lots of money flipping buying property, and on speculation buying.

Before I continue, I need to clear one thing up.  In the above paragraph I used the words investment and speculation seemingly for the same meaning… IT IS NOT!!!  “An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return.” (from Graham and Dodd’s Security Analysis) Speculation is the engagement in business transactions involving considerable risk but offering the chance of large gains, esp. trading in commodities, stocks, etc., in the hope of profit from changes in the market price. (Dictionary reference)

Seasoned investors however have once again started  purchasing investment property.  Unfazed by the financial industries upheaval, or by the constant negative press over real estate as a whole; seasoned investors know that the market has been going through a period of correction which had been long over due.  This is a necessity for every market to go through.  This cycle of ebb and flow or expand and contract allows the market to collect itself, catch up, and then eventually grow again.  These investors have positioned themselves in line with the stage of the markets economic repositioning thru careful analysis of market studies. which will allow for possible positive cash-flow and or a reasonable rate of return on investment.  It is this and not the thinking of whether or not we have reached the bottom of the market that is driving these savvy buyers back into the real estate market.  We are already seeing an increase in rental rates in the downtown Miami and Brickell sector of Miami.  Compared to the beginning of the year when developers were offering all sorts of incentives to attract tenants into the empty buildings up and down the Biscayne corridor of downtown Miami.

Keep in mind when thinking of investing in real estate: “real estate should be considered a long term investment one with the ability to provide a constant flow of income regardless of the economy”.