Best Strategies for Uncertain Times

Why does it happen? I was discussing with one of my friends about the difference between investing in crypto and buying a real estate property, he was showing me how big it will get in the next few years, which I personally believe will happen. But why do I still invest aggressively in land? Because land will never go to zero, in contrast to any existing currency that may one day get to zero value (including our beloved dollar!) We may refer to 2008 when houses were sold almost for bottom prices as 20-30% of their value The thing is, the real estate market is a financial strategy, and if applied correctly will only grow, however, if you go crazy on risky strategies (as millions of people did in 2008) it will inevitably put thousands of properties on the market at the same time, decreasing all properties values, making it an opportunity for whom is able to jump on it. However the intrinsic value of the house, which is equal to a place for you and your family to live, is still the same.

Land holds Value

It Did Not Lose its Value

The value of the property is related to its functionality, meaning that as much as we have people needing a place to live, they will have value, no matter what, and if this is the case, it will never go to zero, because demand keeps pricing up. But Gui, I have seen people buying houses for $1,000 dollars in Detroit Michigan. Yes, I saw it as well, but, did you check its quality? They were almost in tear-down conditions, and due to the high offer of better houses around, they were not attractive at all, as the final rehab cost would be way higher than acquiring a property on the market. Nowadays, you can not find cheap houses in Detroit anymore, properties that I would acquire in fair shape for $13,000 in 2019 are about $35,000-40,000 in areas that I would not even consider buying in, due to the drug dealers' issues!

Ten-Year Cycles

We can see over and over that there are 10-year cycles on every single market, where it booms, grows, keeps moving, goes down, almost crashes, and then booms again. Of course, in gigantic centers, such as Houston, Dallas, and San Antonio, you don’t feel that much, but in Smaller cities, mostly where they are known due to a specific commodity product, a downfall in this product may almost kill the entire business chain of the region, needing several years or maybe decades to get back to a real value.

Understand the Market

If you know, for example, that a property is very close to a gigantic center, means that you have a big chance of never seeing it decrease in value for long in your entire life, or if it is in a rural area that feeds the big centers, same thing, it will always increase a little more in value, due its strategy location and demand. I believe that there is no difference between investments, only the risk-taking of each one, and for any option you should do a huge due diligence before starting, to understand the pros and cons of each strategy. In my case, I have way more experience in Real Estate and that’s why I will stick with it, and the risk is way lower, as it is a stable asset if purchased in good areas, or growing areas.

What Should I Do?

First, get as much information about the strategy that you are interested in investing in, this is fundamental for any person to thrive, you should start playing the game very small, to feel if you like it, because if you do not like the strategy you shouldn't invest, because real estate takes way more effort than just buying a “code on the internet.

Check our Blog

We do have several posts at https://lookforlots.com/blog-list, where you will find a myriad of content to help you guide your decisions. If you want to take action right now check our post “How to make things happen”, it will give you some stepstones to look for before buying. Above everything we should take into consideration that life is so short, and we should have fun, I understand that in difficult times, anxiety goes up, but acquiring new skills and implementing new strategies will make us feel better than just relying on only one financial strategy. I wish you all the best!

References:
[1]: Oliveira, Guilherme. “How to make things happen” Lookforlots blog, 10/15/2023, https://www.lookforlots.com/how-to-make-things-happen-copy