real estate investors are individuals or companies who invest in real estate in the hope that prices will rise during the next couple of years and they will in the end make a profit on such an investment. They are usually not out to make a quick buck: they take a longer term view of the market.

There is one golden rule that applies to all property investments in any type of market: location, location, location. You can rather purchase a run-down property in an upmarket neighborhood, fix it up and put in on the market than buying a huge mansion in a run-down neighborhood.

What is of importance here is a concept called 'over-capitalization', which means you spend money on a property which you can never recoup. A good example would be to buy a small house in a poor neighborhood and then spend huge amounts to add all sorts of luxury features like jacuzzis and swimming pools.

If you buy a small house in an upmarket area, you could easily add more bedrooms and a pool and your chances are very good to eventually make a profit from the sale of the property.

The current worldwide economic downturn caused a lot of unemployment. This resulted in many people being unable to meet their monthly mortgage bond repayments. For the savvy property investor this situation could however present numerous investment opportunities.

If you could get hold of a list of buyers who are in arrears with their bond repayments, chances are that you could buy one of these properties at a bargain price. There are membership-bases websites on the Internet where you can get access to such lists.

Contacting one or ore of these owners and arrange to view the property. Very often they would rather sell to you than allow the bank to repossess the house. Just make sure that the owner didn't neglect the maintenance of the property because he didn't have enough money to do it.

Real estate investors should therefore see the current market conditions as an excellent opportunity to make long term property investments. Don't expect to make a profit within twelve months. Patience is a virtue in this case. Over time property prices will start to rise again and in ten years you will make a great profit on that bargain property you bought today.