15/5/2008 - Make money in real estat |
Author: 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:
* Out of all the different forms of investing, there is one that always increases in value over the long term. Real estate will always go up in value in the long run.
* Long term investing in stocks CAN show increases in value. Just look at the Berkshire Hathaway group of companies. To deny their success is foolishness. BUT, in most cases buying and selling stocks is risky and does not guarantee a long term increase in value. Any sudden change in tastes or technology can cause a sure winner of a company to cease to exist in months if not weeks. For example, just how many buggy whip manufacturers are there? There used to thousands.
* The population of the country is continuing to grow. They all need places to live. Barring an economic disaster, most people will have the money to either buy or rent their own apartment or house. Therefore, demand for real estate will ALWAYS increase. Increased demand ALWAYS means an increase in prices.
* 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.
After you've bought your own home, if you have extra money available to invest, you can try finding "distressed" houses -- fixer-uppers -- and "flipping" them. Also, the foreclosure market is expanding currently -- if you look hard, you can buy property for pennies on the dollar. You can either resell immediately, or rent out to others and enjoy a steady monthly income.
As with any investment, there is risk in investing in real estate. As we are seeing now, in some areas, housing prices are falling as people are defaulting on their mortgages. But you need to remember that a drop in prices now means a greater profit in the long term.
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!
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