{"id":1127,"date":"2007-03-09T09:50:04","date_gmt":"2007-03-09T16:50:04","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=1127"},"modified":"2007-03-09T09:50:04","modified_gmt":"2007-03-09T16:50:04","slug":"real-estate-investment-theories-that-can-actually-help-you-make-money","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1127\/real-estate-investment-theories-that-can-actually-help-you-make-money\/","title":{"rendered":"Real Estate Investment Theories that can Actually Help You Make Money"},"content":{"rendered":"

Some of you may have noticed a drop in my postings over the last two weeks. The driver behind this has been mid terms. For those of you who don’t remember what that was like when you were in school, imagine doing all of the work you do in a typical month in a week. All of my studying got me really thinking about this issue of theory vs. practice. One of my pet peeves about most educational experiences is that there is too much theory and not enough practice. Worse yet, many of the theories do not work in practice. I thought I would spend some brief time outlining a few higher level theories that work and their implications in practice (don’t click away, I promise there is good practical knowledge to come).<\/p>\n

Theory #1: Most markets tend to have a natural vacancy rate and there is a mean reversion tendency if prices get too high or too low. A lot of very complicated math proves this out for most markets<\/p>\n

Practice #1: Most markets tend to stay at a certain vacancy rate. If the level of vacancy gets too high, rents come down until the natural vacancy rate is achieve. If vacancy gets too low, expect prices to increase until this vacancy rate is achieved.<\/p>\n

How can the investor use this? Take a look at the historical vacancy of a market. If you are technically literate a simple chart will give you an idea of the natural vacancy rate. If you are not, you can probably simply eyeball it and be close. Try to buy when vacancy levels are above the natural vacancy rate. Properties will be cheaper and you will experience appreciation by simply waiting for the market to correct itself. This is a simple strategy that really works in practice. Smart buying can keep an investor in profits in an up or down market. This point is an interesting twist on buy low\/sell high. Essentially buy vacant, sell full.<\/p>\n

Theory #2: Interest rates affect cap rates directly and indirectly. As interest rates rise, cap rates rise and property values fall. Additionally, Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Some of you may have noticed a drop in my postings over the last two weeks. The driver behind this has been mid terms. For those of you who don’t remember what that was like when you were in school, imagine doing all of the work you do in a typical month in a week. […]<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,2,8,5],"tags":[],"class_list":{"0":"post-1127","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-blogging","7":"category-general","8":"category-investment","9":"category-real-estate","11":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1143,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1143\/the-carnival-of-real-estate-investing\/","url_meta":{"origin":1127,"position":0},"title":"The Carnival of Real Estate Investing…","author":"Greg Swann","date":"March 13, 2007","format":false,"excerpt":"...is up at RE Agent in Connecticut. This week's winner? Our own Michael Cook with Real Estate Investment Theories that can Actually Help You Make Money. Michael has been an outstanding addition the the BloodhoundBlog roster. This is his second win at the Carnival of Real Estate Investing. If you\u2026","rel":"","context":"In "Blog Carnivals"","block_context":{"text":"Blog Carnivals","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blog-carnivals\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":18243,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/18243\/overnight-news-victorias-real-secret-self-loathing-apparently\/","url_meta":{"origin":1127,"position":1},"title":"Overnight News: Victoria\u2019s real secret? Self-loathing, apparently.","author":"Greg Swann","date":"June 19, 2021","format":false,"excerpt":"What to make of marketing? One business after another has thrown Claude Hopkins, et seq., under the bus \u2013 in pursuit of what, exactly? None more daft than Victoria's Secret, surely. They have elected to reflect their actual clientele, rather than the aspirational impulses of the mates of those matronly\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":2560,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2560\/understanding-the-laffer-curve-reality-myth-whats-next\/","url_meta":{"origin":1127,"position":2},"title":"Understanding the Laffer Curve — Reality & Myth — What’s Next?","author":"Jeff Brown","date":"February 2, 2008","format":false,"excerpt":"Being just slightly to the right of Attila the Hun, taxes are of great import to me. I believe in principles long established. One of them is small government works better for its citizens than large government. Lower taxes are better than higher taxes as long as the bills are\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":18180,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/18180\/overnight-news-if-dr-fauci-is-a-marvel-comics-super-villain-there-couldnt-possibly-be-any-others-right\/","url_meta":{"origin":1127,"position":3},"title":"Overnight News: If Dr. Fauci is a Marvel Comics super-villain, there couldn\u2019t possibly be any others…\u00a0Right…?","author":"Greg Swann","date":"May 29, 2021","format":false,"excerpt":"We now know that Dr. Anthony Fauci is every bit the Marvel Comics super-villain he has seemed to be all along. He deliberately engineered the virus \u2013 his behest and funding, not his actual effort \u2013 and it remains to be disclosed if last year's events were actually biowarfare-by-proxy. Just\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":123,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/123\/marketpulse\/","url_meta":{"origin":1127,"position":4},"title":"MarketPulse…","author":"Greg Swann","date":"July 23, 2006","format":false,"excerpt":"I had a pretty good turn-out for my open houses today. Cathy normally does these two, may god bless her aching feet, but she had to work a third open house. The homes I worked were in the F.Q. Story Historic District of Phoenix. When the real estate market is\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1194,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1194\/avoid-being-the-greatest-fool\/","url_meta":{"origin":1127,"position":5},"title":"Avoid Being the Greatest Fool","author":"Cooksquared","date":"March 22, 2007","format":false,"excerpt":"The greater fool theory is simply this: Even if doing X doesn't make sense, there is always someone dumber than me I can sell X to. Replace X with inflated real estate, sub-prime mortgages, stocks, garage sell junk, etc. This is the crux of bubble thinking. The major problem with\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/1127","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=1127"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/1127\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=1127"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=1127"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=1127"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}