Real Estate Investing
Real estate investing can be a really exciting method of investment. While the stock market can offer some excitement if there are changes in the economy, in contrast real estate is a lot more stable with regards to a return on investment. However, the excitement real estate investing can offer the individual is equally tangible. We have all read outstanding stories about how people have bought a house for one price, done it up for a cheap amount and then sold it for a ridiculous profit – I am sure everybody has a story along these lines that happened to the friend of a cousin of my wife’s mother. Did you think they were good to be true? Well ironically there are potentially huge gains that can come from real estate investing, but these “get rich quick” stories are only a small percentage of the deals that go on daily around the world.
However, if you are a smart person, who does their homework before entering into a deal real estate investing is a great way to make money, both in the short term and in the long term. You as the investor have a lot more control over your investment when buying and selling real estate and the process can be as “hands on” as you like. Some people buy housing properties as a rental investment, pass on the property to a rental property manager and simply rake in the checks each quarter. Other people will buy a property, do it up themselves, then find tenants for the property and be involved in every stage of their investment. The choice is yours and depends on what your short and long term goals are for your real estate investing plan.
The housing market probably offers the most scope for people to actively manage their investment. If you can pick up a property fairly cheaply, do it up and improve its value, and then either resell the property or rent it out to carefully screened tenants then you will make good returns on your money and unlike many other forms of investment you can control the entire process from start to finish. Although this same type of control can exist with real estate investing in commercial properties, hotels, car parks, bare land and any other type of property, it is the housing market where you can really get your hands dirty and watch your investment grow as a result of your endeavors.
One of the key benefits of real estate investing is that you can make a return on your investment in so many different ways. Firstly there is an increase in the capital value of your property that occurs over time. Most urban areas that have elements of growth industry will see a steady but significant increase in capital values of property realizing very tangible returns in the five to ten year time bracket. The second method of getting a return on your investment is to buy a property cheaply (below market value), add a coat of paint to the inside and out and resell the property at market value or higher. Finally the property can be bought as a savings scheme with the property owner using rents from the investment to pay off mortgages and increase owners equity in the property. Whichever method you chose to make money in real estate investing, you can have as much control or not, over the process as you want to handle.