Real Estate Investors

For decades - and especially the last decade - real estate investors  seeking income have been advised to allocate a portion of their assets to real estate. After all, real estate offers a relatively high level of income (up to a 15% rental yield in some locations) and - as a hard asset - offers at very least some protection of principal.

In recent years, investors often sought diversification into real estate through real estate investment trusts (REITs), since owning actual properties outright was too expensive for the average retiree or income investor.
Bubble-era housing prices and the low interest rates that fueled them made it more attractive than ever for developers to build condos all around this country, but a recent decline in households' net worth, coupled with tighter lending standards, has made it harder than ever for developers to sell their properties. This bust for lenders has been a boon for savvy investors.

By employing a real estate auction company, savvy real estate investors  are able to pick up condominiums in desirable locations like New York, Chicago, and Los Angeles for sometimes less than half of their original asking price.

And the case for buying condo properties now is compelling for many reasons. First, as an income-producing asset, real estate is almost unrivaled, since income can be realized in perpetuity (or until the building collapses) - try getting that yield with a bond!

Second, the prices that many real estate investors are paying through a real estate auction company often augment those yields and account for a good deal of greater downside in the market. Third, as a hard asset, real estate will outperform bonds or cash in an inflationary environment. And fourth, real estate is useful - it can be used as a residence. What high-yielding stock provides walls and central air?

Joking aside, most metropolitan real estate markets have taken huge hits, but there are some signs of stabilizing. The buyers who will make the most money in an inevitable long-term rebound in real estate are those that are willing to stick their necks out early.

Owning a condo offers an alternative to owning a soft-asset REIT for diversification and has the added bonus of being a hard asset that investors can live in or pass on to children, grandchildren, etc, and the ability to buy at auction offers the opportunity to get away with paying prices that - years from now - will seem impossibly low.