Investing in real estate
by F. R. Woodner
You've probably read these statements before, but it is very important that you re-acquaint yourself with the truths that they convey:
* There is an investment that, over the long term, ALWAYS increases in value. That investment is real estate. Barring a disaster affecting a large section of the economy or society, the value of real estate, over the long term, will always increase.
* While buy-and-hold techniques in the stock market CAN increase in value, it exposes investors to risk. A stock investor may have a portion of his money in a company that has been illegally inflating their income or assets (like Enron). Or they may have their money sunk into a company that isn't prepared for any change in technology or tastes. Such a company will surely go out of business, leaving investors holding onto worthless pieces of paper. How many typewriter ribbons have you bought lately?
* More people are being born every day. More people are immigrating from overseas. People need places to live. Unless we get hit with a worldwide economic depression, most people will have the money needed to rent or buy a place to live. Therefore, demand will always be increasing. Prices always go up when demand increases.
* There is a limit on the amount of land available to be developed. As one real estate investor once said "Nobody is making new land". Environmental challenges will force governments to increase the amount of "green space" there is. Eventually, there will be a scarcity of undeveloped land on which to build. Scarcity causes prices to go up too.
Almost anyone can invest in real estate. If you own your own home, you've already started investing in real estate. And that's the easiest way to get started. Repair your finances and buy your own home or apartment instead of renting. The value of the house that you buy will end up being worth for more than you paid once it's time to sell.
There are a number of different ways that would-be real estate investors can get into "the business". If you already own your own home, and your finances are good, you can find the real estate niche that you're most comfortable with, and start investing. Finding fixer-uppers, buying foreclosures, or buying from "motivated" sellers are ways of investing in real estate at a bargain price. Flip the property or rent it out to others -- the choice is yours.
Investing in any form has a degree of risk. So does real estate investing. Some areas are seeing house prices fall, and the number of houses in foreclosure has gone up. This is just a temporary situation. As we've already seen, in the long term, real estate MUST go up in value.
Before you do anything, you need to educate yourself on the different methods of real estate investing, and their pros and cons. Armed with knowledge and a good well-thought-out plan, you should be able to succeed. Good luck!
Fran Woodner is a freelance writer who frequently writes on
real estate investing, and
home business ideas. You are welcome to reprint this article - but get your own
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