In light of the losses many people have taken in real estate in recent years and an economy that is questionable at best, many wonder if investing in real estate is as good of an investment as it once was.
Some of the motivating factors for someone to invest in real estate have been: greater financial security,higher net worth less dependence on job more control over your personal financial future, just to name a few.
I believe those goals can still be attained. Investing in real estate provides a tried and true path to achieving these goals over time. Over Time being the operative words here, yes real estate prices go up and down and I know of no one who has a crystal ball to tell when these shifts will happen, but historically “over time” real estate values have increased. That being said their those who bought or I should say speculated to hold a short time and resell for a profit a few years ago some profited and some lost that is why I called them “speculators” not investors.
I should point out that whenever I speak of real estate investing I am not talking about buying a house for you to live in I am always talking about Income Producing real estate, which could be residential rental property, multifamily apartment buildings, office buildings to lease out to tenants and so forth.
With the middle class in America dwindling, I believe the best chance middle America has to achieve financial independence is with the tried and true “buy and hold” real estate investment strategy.
Whether buying with cash, loans, or taking control of your retirement by investing in real estate with your own “self-directed IRA “account there are opportunities for positive cash flow that we have not seen in years.
Not only could you benefit from this cash flow to have more money to live on but you could use it to invest in additional real estate. And what many investors realized is this income from real estate (passive income) is treated differently than earned income (wages) or portfolio income ( capital gains from stocks etc).
Throughout history people have counted on investing in real estate to secure their financial success. Really when you invest in real estate, you make your profit when you buy, not when you sell. In other words, you have to buy the property at a low enough price so that you are certain to make a profit when you sell.
Real estate investing in 2015 is different than it was before the real estate market crash. Prior to the crash many (novice) investors were focused primarily on speculation of appreciation (they weren’t really investing in real estate with a sound business plan, they were simply buying real estate with the hope that somebody else would pay more for them six to 12 months later).
Back then finding good positive cash flow properties was extremely difficult because rents were too low to justify the high property prices . Today’s real estate investors have shifted their strategy to a renewed emphasis on safety and looks for an opportunity, based on facts and evidence without emotion, if the numbers don’t support enough of their exit strategies, including a buy and hold strategy with positive cash flow, they have as part of the plan. They will walk away and from a real estate investment property that doesn’t meet their criteria.
So, how do you safely invest in real estate? How can you be self-assured when there is still so much fear and uncertainty out there? It is actually much simpler than you might think.
Real estate investing historically has always been a good long term investment vehicle, if you have an interest in owning real estate for investment purposes, my advice is don’t get caught speculating in real estate without a proven team and a plan. You learn how to invest in real estate with a plan, and without emotion.
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