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.

* 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?

* Censuses prove that the population of the country is increasing every year. Babies are born, growing into adulthood, and starting families of their own. All those new families will need places to live. Short of an economic cataclysm destroying the economy, people will have the money needed to pay rent or mortgages. The need for housing will increase; therefore, housing prices will increase.

* There is only so much land available to be developed. In the future, much of the undeveloped land will be protected and preserved to help combat expected pollution and environmental challenges. Less land available to build on will mean higher prices in the future.

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!

Article Source: http://www.articles.ask-me-about.com

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