As Americans we have the opportunity to pursue our personal happiness and prosperity. For many, it means starting and running a company. There are hundreds of new business activities that are formed every day across the country. In fact, experts estimate that there are currently over 25 million small businesses across the country that create new jobs and contribute to our economy.
So, Why invest in real estate? Real estate investment is one of the easiest ways, and historically it has been one of the most successful ways to achieve financial independence. With a relatively small money investment and a little sweat capital, it is possible to generate a significant profit. Take a moment and consider the list of the richest 400 Americans in the world, compiled by the Forbes magazine. Literally dozens and dozens of people on this list made their fortune in real estate. We can not really guarantee that one day you will be on this list of richest Americans, but we can learn some of the principles that these fabulously rich men and women used to achieve their wealth.
Real estate investments have a bright future. Real estate in the United States has been a solid investment vehicle for many years. Since the Second World War housing prices have risen dramatically in the United States. There have been relatively short periods in which housing prices have fallen, for example the current period, but in the long term property investment has been a very successful and lucrative investment for many people.
Purchasing real estate is much more than just finding the right place to call home. In fact, one in four residential buildings is bought as a real estate property. Even if you are a real estate investor, it is sometimes stressful, it can also be very economically rewarding.
Investments in real estate have become increasingly profitable in the last fifty years and have become a common investment vehicle, but often misunderstood or underutilized by many. Real estate as an investment takes many forms from single family homes to multi family houses and apartment complexes, or commercial properties, including office space, industrial warehouses and retail. The investment can be purchased and owned directly, or through different types of partnerships and investment confidence.
As we all know, real estate is often discussed in the news media. Often there are reports and statistical information about new home sales or hot markets across the country. Reports can show how interest rates affect property prices and other complementary markets such as consumer finance and lending. There is always a lot of hype in the media regarding real estate, and this hype and chat can come from both reliable and unreliable sources.
Do not get busy in chats from news organizations about real estate values or interest rates. Instead, be focused on local markets and other markets you may have a particular interest in. Just like a home in your neighborhood can be a good buy right now, consider and realize that there are thousands of neighborhoods in America with thousands of homes that are as good for deals as the one in your neighborhood.
Do not let media noise affect your feelings and decision making and thus affect your potential profit. Many investors have gone against the grain and invested in real estate in what the media can refer to as a less than desirable area or market, and consequently have made personal fortunes.
With a stock market analogy, when would you suspect is the best time to buy shares? At a 52 week high? Sometimes it can be a successful strategy, but more often you want to buy when a stock company is trading well below the actual value, which is more likely to occur when it is down or down. The same idea applies to real estate. Many people are afraid to buy on a down market for many reasons, but mainly because prices are falling. This is due to the surplus stock in the market. When a market is saturated with countless homes or real estate for sale, it means stocks are up. The basis for free market economy applies. When there is an excess of property on the market, sellers are forced to adjust prices lower to attract potential buyers. This is the law of supply and demand. Buyers will only buy real estate at a price they consider reasonable.
With so many houses in the market, both home buyers and investors have a historical opportunity to dictate the price they consider reasonable. This is what is usually called a buyers market. It implies great economic potential for those who recognize such an opportunity.