Investment Property Protecting Yourself from a Bear Market

The recent stock market falls are a worry as they decrease wealth and liquidity in the economy with property prices falling they could fall further

There are however solutions that allow anyone in investment property to protect themselves against falling prices and lock in their current value regardless of how far the market goes down.

The background

We have had a great rise in property prices across the board but this is now coming to end and prices are falling and they could due to the size of the rise plunge.

The facts are:

1. Interest rates have risen.

2. Many people who started with low starter rates have moved to the full rate - the equivalent of an interest rate rise to them.

3. The huge property boom has seen a glut of new housing that is proving hard to shift.

4. Uncertain economic conditions are seeing people stay put rather than move.

5. First time buyers due to the cost are finding it hard to get on the property ladder.

Lessons from History

It's an economic fact that when interest rates are up and liquidity is decreased the housing market slows.

With the huge boom we have just seen prices could tumble and if stocks turn into a bear market this will make things worse.

Peace of mind

There are companies that for a small premium will guarantee the value of houses at a specific rate.

Protection against falls

If prices tumble then you can sell and get the full locked in rate.

On the other hand, if prices rise then the gain is the property owners.

Gains are unaffected

Of course these schemes charge but it's a small fraction of a percent annually and for many people in investment property this is a small price to pay for peace of mind.

Buy new property with locked in value

It also allows speculators to buy property with a fixed lock in rate of value so that even if they think prices may rise they are protected against falls.

These schemes have done very little business due to the huge bull market we have seen in the US economy, but they are set to do increasing business as investors take a more conservative approach.

The costs are low and the benefits far out weight the cost for many property investors - due to the peace of mind these schemes give.

MORE INFO ON PROPERTY INVESTING & PROTECTION

On how to get peace of mind and locking in the value of your property at current value visit our website for a huge resource of articles, features and downloads and at http://www.net-planet.org/index.html