Investing in real estate

Everyone has heard of the following axioms when it comes to investing and making money. But few people have actually taken the advice to heart and followed through in order to achieve their goals.

* Different investment fads may come and go, but only one form of investment always goes up in value over the long term. That form of investment is real estate.

* Berkshire-Hathaway has proved that buy-and-hold techniques in the stock market can work. However, holding onto shares over a long period of time leaves an investor exposed to risk. Company management will change over time -- shrewd managers and leaders may leave a company only to be replaced by those less diligent, or less able, or even less honest. Technology is in constant change -- a company whose shares you're holding on to may suddenly find itself with obsolete technology with no way to catch up. Remember what happened to Polaroid and their instant cameras?

* 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.

* No one is making any more land. And, with the clear need to maintain if not expand our current "green spaces" to help combat pollution and global warming, there soon will be significantly less undeveloped land available for real estate investors to develop. Increased demand ALWAYS means an increase in prices.

You don't have to be a rocket scientist to invest in real estate. The simplest way is to own your own home. Getting your finances under control will enable you to buy instead of rent. As you pay down your mortgage, the value of the house will increase. When you decide to sell, you'll find yourself with more money than what you paid for it.

If you already own your own home, and your finances are sound, there are a number of different ways in which to invest in real estate available to you. Buy a foreclosed property, or a property about to be foreclosed. Buy a distressed property and "flip" it. Find a distressed owner (one who is being forced to sell), and buy the property from them with no money down. Then rent the house out and pocket the profits.

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.

Learn everything you can before you try and "do your first deal". Plan carefully, get advice from professionals and experts, and you should end up becoming a successful real estate investor. Good luck!

Article Source: http://publisherscloninghouse.com

Freelance writer Fran Woodner writes on real estate investing, and personal finances.
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