Real estate expectations

One thing the housing downturn has done is adjust expectations regarding the return on real estate as an investment. I still maintain that real estate is a good investment, but when homes were inflating quickly in value a few years back, many people got the idea that any purschase was a good investment, and it was that way for awhile, but not anymore.

Now, a lot of thought has to go into an investment, with location still being an important factor, but other important factors are what the homes will used for and how long will you keep it. If you are purchasing a home to live in, then if you live there 6 or 7 years, you'll probably do fine when you go to sell. If you are buying the home as a true investment to rent out, then the regular concerns apply -- what is your overhead, is there a cash flow, are you maintaining good occupancy, etc.

True investment is still a good idea in Savannah, because the rental market is strong, and right now home prices are low, especially if you are willing to put a little sweat equity into some of the old homes that need cosmetic work. It doesn't appear that home prices are going to drop much further, especially when the Hunter Airfield troops begin coming home from Afghanistan which will put pressure on prices to remain stable or slightly rise, if they buy homes and don't rent instead. Plus, SCAD is growing and this is always good for real estate. I have a good feeling about the real estate future in Savannah -- it's a great town, and if tourism is any indication of interest to live here, we'll do great in the years to come.