In an economic downturn or recession, the people who invest in real estate especially homes, condominiums, and townhomes, or even multi unit buildings, can still make money in a buyers market by being particular about the properties they invest in.

Everyone in the United States must have a home to live in, whether its a single family home, condo, or townhome, or even if its in an apartment building where many of the multitudes call home and are perfectly happy with living in an apartment.

Nevada and Florida have many foreclosures taking place with investors lining up to grab the properties to be put in their portfolios as rental properties so they can add to their monthly income and gross personal worth.

You have an ideal way to add properties to you portfolio of rentals when you purchase something cheap enough that the rent will make the payments.

If you are planning on investing in real estate in this manner, make sure that the home is located in a solid area where the property values are increasing.

You can hold onto a property until the residential real estate market begins to turn around and it becomes a sellers market and this will be noted when the demand for housing is greater than the supply and will cause the value of the homes in your area to rise significantly.

If you are renting a home now, you need to realize that you are paying a mortgage for someone else, when you could be paying yourself that money as well as taking advantage of tax incentives that are available to homeowners if you owned the home instead of renting it.

Because the market is now a buyers market and there are many more homes for sale than there are buyers, it is smart to look at real estate investment in this recession as a long term investment.

Be advised that foreclosed homes have already been looked at by many savvy investors before they came on the market and make a better long term investment, or a home in which you plan to live, than a home that can be fixed and sold quickly.

If they have gone into foreclosure because of some unforeseen circumstance that will be alleviated, such as someone losing their job, you can make them an offer to rent to buy, which means that a portion of their rent can be used as a down payment if they want to buy their home back when things get better.

The key to building residual income in any real estate investing venture is to know which deals to make and which ones to leave alone.