Forcasting the effect of gas prices on Real Estate investments...

[Susan Iwertz]

So a couple of "non-investing" friends are telling me that I should wait to get started in my real estate investing for about 4 or 5 years, or until the banks are failing again...(sound's ominous...)  

If they are right about home values falling drastically with all of the recent hits to the oil industry in Oklahoma, Texas, etc., would I be better off waiting?  Or investing in other markets?  I do like the idea of starting out close to home.

And what about Flips vs Holds in this market?  

Thank you for sharing your thoughts and wisdom!

~Susan

[Ned Carey]

@Susan Iwertz  Areas that can be affected by big swings in oil prices can be tough to predict. A big loss of jobs  means a possible big loss of population and a drop in rents. 

With that caveat aside, generally I look at today's cash flow for rentals. Whether it is a hot high priced market or a low priced market if the property cash flows well it will generally carry itself though purchase pricing swings.

I don't now your specific market but my guess is with falling oil prices for some time it is NOT an overheated market. Nationally I don't think we are overheated at all. Affordability of buying is high, number or renters vs owners is high, and the cost of renting vs owning is high. Also when inflation returns housing prices are likely to go up. 

How many of those non investing friends saw the obvious opportunities in both stocks and real estate when the crash came in '08-10 and took advantage of them? 

Flipping and other shorter term strategies are a safer bet when prices are high. Buying long term buy and hold is often a better choice when a market is bottoming.