When he wrote The Wealth of Nations Adam Smith expressed that the invisible hand of competition automatically transformsself-interest into the common good. This is the great idea expressed in this article on capitalism by Ken Fisher. And where not a better place to see how the wheel of capitalism turns than in the world of real estate. Surely, if Adam Smith could spring up from the grave and take an active role in today’s economy, he would submerge himself into the housing market and invest wisely, while investing back into the common good. This article will look at some facts about the housing market, and how investing in homes can make a profit while stimulating the economy and help to lift people upwards into breaking through their teetering class barrier.
Now is the Time to Invest
According to the S&P Case-Schiller Home Price Indices, the cost of homes is down by a third and the housing market is flooded with foreclosures. Investors are foaming at the mouth to buy scores of homes at incredible discounts and resell them for profit. But there are some ways to do this while stimulating the economy and helping others get back on their feet.
Making a Profit, Lending Hope
When the time to invest in bank owned single-family homes is prime and hot for investors, it usually means times are bleak and dismal for the families who lost almost everything. What with layoffs still striking families, people have been forced to abandon their homes and search for rentals. In a CNN Money article the author states that a number of investment firms, hedge funds, private equity partnerships and real estate investors have turned to eager buyers of single-family foreclosure homes. Investment banks are even lining up financing options to keep these purchases on the rise. Considering this, there are some great moneymaking options for investors that, in turn, will help the evicted families get back on their feet. By purchasing foreclosures and renting the homes back out to the families who once owned them, investors are still turning a respectful profit, while lending hope to families by keeping them in their homes. Investors could even set up options in which the former homeowners could work towards re-owning their home again when they get to a point in their employment status that would enable them to qualify. If more investment firms, hedge funds, and real estate investors embraced this idea and bought thousands upon thousands of foreclosures across America, this in turn would eventually lower the cost of home and apartment rentals, which would make housing more affordable to families struggling to stay on the fringe of society.
WWASD
We have all seen the bumper stickers, but in this case, what would Adam Smith do? As someone who wrote and lectured passionately on the principal of transforming self-interest for the common good, it seems apparent that the father of Capitalism would have stepped up and used the housing market as a platform for proving the philosophy behind his ideals. If you have considered investing in this arena of opportunity, consider this article, and do further research. You just might be able to turn a hefty profit, while bringing dignity back to a family in need.