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Is Bay Area Real
Estate Risky Business
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Bay Area real estate is an ever-increasingly popular investment for
prospective property or home owners in California. The location is
prime, and the price is always right. Whether it is due to the area's
oil-rich location near the shore, the beautiful weather, the breathtaking
views, or the pocket-fattening constant tourist traffic in San Francisco,
the Bay Area is a very popular choice of locations for both prospective
real estate agents (who are seeing dollar signs, most likely) and prospective
purchasers.
Since 2002, property values in the Bay Area have been rising; increases
in interest rates have caused the actual cost of some properties to
go up as much as 40%. For this reason, many people are selling their
properties at extremely high prices, equaling higher commissions for
the real estate agents who receive a portion of the property's purchase
price as payment for their services. Just as there are people who are
selling their properties at high prices, there are just as many investors
out there who are willing to purchase these slightly over priced homes,
office spaces, warehouses, or other properties just to turn around and
sell them back when the values shoot up again. It could be said that,
while all investments are risky (especially when it comes to real estate)
the values of real estate in the Bay Area is usually easily predicted,
and is somewhat a safer and wiser investment than other real estate
opportunities that may come your way. The average price of a home
in the Bay Area is in the neighborhood of anywhere from $500,000 to
$650,000 and while your investment could backfire should these properties
drastically decrease in value, smart bay area real estate investors
wait to sell until the prices go up, maximizing the profit margin they
could make off of the sale.. Of course, breaking even never sounds
as good as making a hefty profit in your financial endeavors, but as
an investor in Bay Area real estate using your head can have you doing
well for yourself most of the time if not all of it; it is important
not to forget that a reserve of start up funds is always necessary to
enter into such a hefty investment as Bay Area real estate.
Bay Area real estate investors are beginning to start up a pattern of
spending beyond their means when it comes to these high-priced properties.
Federal guidelines state that one should not take out a mortgage that
equals more than 30 percent of your total monthly income; most wise
people would take such legally mandated "advice" to heed, but more and
more people are throwing monetary caution to the wind and, in attempts
to catch a prospectively profitable investment opportunity many do get
caught up in the ever-increasing housing market crashes, losing money
in the end. Of course, some people are more affected by this than others.
Bay Area real estate is a great investment for the smart investor, who
knows the market well and pays attention to the fluctuations in property
values.
About The Author:
Peter Dobler is a veteran in the IT business. His passion for experimenting
with new internet marketing strategies leads him to explore new niche
markets.
Read more about his experience with real estate; visit
http://real-estate.online-business-idea.com
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