The real estate market has hit bottom. Prices are being dropped on everything. However this is the best time to be a real estate investor. When you are investing in real estate the market doesn't matter as much as the price you can buy property at. If you are holding long term then you have to accept the market fluctuations. But if you can buy at the lower end of the cycle that is the best time to buy. The trick is knowing when that is.

If the market is experiencing a major downturn it is a great time to be buying due to a vast number of bargains. You can buy at rock bottom prices. However, do not get too negatively geared because this is how most investors get themselves into trouble in the first place. Go for positive gearing. In other words make sure your rental income equals or exceeds your outgoing expenses, to include mortgage payments. If you have other income you may be able to stand an extra $100 or more per month to top up the mortgage but try to avoid it. Negative gearing is ok if you have a really good income and a tax problem.

When real estate prices where climbing we all knew that our property values also climbed. Now in a declining market and slower home sales, investors need to be able to hold those property investments for a longer period of time.

Several investors that started during the "boom" now have to change how they are thinking about investing. This is the time when we separate "those who can from those who got lucky and made a few bucks". Now is when the long term hold plans must start becoming the focus. This is a business. You need to do the math. Will your income from your investment cover the expenses/new mortgage?

Having said all that, we cannot avoid the fact that with good research and due diligence the depressed market presents investors with the GREAT opportunities to build a portfolio of properties for long term gains.