It’s no secret, the United States, the UK, and other countries have experienced a housing bust due to the loud pop of the credit bubble that reverberated around the world. Everyone is skittish about real estate now since housing prices have been going south.

So where’s the opportunity? Let’s face it, in every crisis there is an opportunity. Well, I’m going to let you in on a secret. The housing bust may actually be good for real estate investors. Let me tell you why.

During the housing bubble, prices on real estate soared through the roof. Everyone wanted a piece of the hot real estate market and thought that the key to riches was through the front door of their next piece of property. Banks went along for the ride and lent money like there was no tomorrow. This is what caused the bubble.

The bubble got too big and burst. Now prices on homes are deflating and nobody wants to buy property. Many people are backing out of mortgages where the amount they owe is worth more than the property and due to the sluggish economy, others are losing out because they can’t afford the mortgage.

So why is this good? Isn’t this bad news? Actually, not necessarily. If your credit is decent, now may be the best time to get into the market. Housing prices are lower than they have been in a long time. So while they could go down more, they are still cheaper than the prices that everyone was clamoring to buy at just a short time ago. But here’s the catch. People aren’t buying homes now, so they are renting instead. So what does this mean? Well, it’s supply and demand. The housing supply has gone up and many houses are on the market for lower prices, but demand for rentals has gone up. So when you add these two factors together, you can see that you can now buy a house for less and rent it out for more than you could have in the past. Sure, if the housing market is still going down in your area, the price may go down further, but if you can buy a house for a mortgage payment that is significantly lower than what you can take in in rent payments, then you will be making out like a bandit. Yes, it’s a bad time to spend a lot of money on your primary house, but it’s a great time to buy investment properties in the residential market.

Remember that it is sometimes those who go against the herd that get to where they want to be. Those people who hopped on the housing bandwagon got burned. So now that they are going the other way and avoiding residential properties, do you think that it’s a good time to follow them? Or maybe you know something that they don’t?

Written for Richbitchitch.com by Rick Hyland