Is a bad economy or good economy the best time to invest?

Hi, this is Steve Rozenberg with Empire Industries Property Management Company located here in Houston, Texas. Today what we are going to talk about is a bad economy good or bad for Investors.

We got a lot of questions recently about what if the oil price is going down, is that going to be bad for investment properties, is that bad for real estate and ultimately is that bad for Houston.

First of all I can tell you that even for Houston the oil business here is a dominate player, it’s the only factor that drives the economy here in Houston. A lot of people don’t realize that we have NASA here and two of the largest airlines in the world are based here. We have United Airlines and South Western Alliance, which both have hubs of operations here. Also, the Texas Medical Center, which is the number one medical center in the world. If it was its own city, it will be the 16th largest city in the United States. They say every kind of medicine is actually practiced here at the Medical Center in Houston. The Houston port is the number one exporting port in the country and also we have Hewlett Packard computers here. So there is a lot of other derivatives that drive the revenue of Houston, not just the oil.

Right now Houston is the 4th largest city in the United States. The next census is saying that we will be the 3rd largest city overtaking Chicago, it’s the fastest growing city in the United States by far. Right now when you think about it the number 1, number 2 and number 3 cities are Los Angeles, New York, and Chicago. The median house price averages there are $485,000 to $650,000 per house and in Houston the median house price is $153,000. So I think obviously you can get a lot more money, a lot more return on your investment here in Houston.

And, as far as investing goes, if someone does lose their job, people in the oil business or other facets of the oil business happens to lose their jobs because of layoffs, these people become motivated sellers and in the investor’s world that’s good. That’s good for marketing your properties as far as whole selling, in getting deals and getting better prices. Those people that own homes now become renters. So actually that drives up the price of the rental, drives up how much you can get for your property, it drives up demand, and I hate to say it but a bad economy is actually better for a landlord than a good economy. And in the good economy everybody can get a loan, everybody is moving out in the Rental properties. Here when the economy goes bad you don’t have that. People are staying in the properties, maybe downgrading their properties, selling their properties, renting so they don’t know what’s going on so they are kind of sitting down on the sidelines.

So I don't personally think that this is a bad thing for the investment community. I don’t think it’s going to decimate Houston. I would definitely encourage you to continue investing here in this city.