If you have ever considered whether or not you should invest in real estate, then this article might just help you decide your answer. Regardless of what real estate agents and real estate investors will tell you, owning real estate takes more time and commitment than just buying stocks and bonds. Ultimately, real estate requires a bit of management that many investors choose to forgo when investing in the stock market, but this is also why the real estate investment market offers higher rates of return.
The first step in detmining whether or not you should invest in real estate is to analyze your current situation, without any emotion. Exactly how much money do you have, where is it deployed, and what rate of return (or return on investment) have you been achieving over the years? You must be able to define your present situation if you want to make a responsible decision to either invest in real estate or choose not to stay out of this market.
Once you determine your current situation, you should then establish an amount of money that you would be willing to invest in real estate as well as a higher rate of return for it to motivate you to be more involved in your investing. For example, if you have been getting 8% annually in your mutual fund, jumping into real estate for an anticipated return of 9% hardly makes sense. You would be better off staying with what you have than taking on more responsibility for little additional return.
Most small real estate investors are able to get better than double their mutual fund rates of return by using a safe, long-term real estate investing plan. The plan is so simple that you have already heard it many times before ... buy low and sell high!
Investing With Real Estate Market Cycles
This is NOT about flipping real estate. It is about a buy and hold real estate investment strategy that requires the investor to buy during the "buy cycle" and sell during the "sell cycle."
Right now, we have entered into a buy cycle that will last for several more years, and the anticipated sell cycle won't occur for 7 or more years. By purchasing income producing properties, savvy investors will most likely earn returns that far exceed their hopes in the stock market. If you have the patience and means to wait for the sell cycle, you should strongly consider investing in real estate.
The first step in detmining whether or not you should invest in real estate is to analyze your current situation, without any emotion. Exactly how much money do you have, where is it deployed, and what rate of return (or return on investment) have you been achieving over the years? You must be able to define your present situation if you want to make a responsible decision to either invest in real estate or choose not to stay out of this market.
Once you determine your current situation, you should then establish an amount of money that you would be willing to invest in real estate as well as a higher rate of return for it to motivate you to be more involved in your investing. For example, if you have been getting 8% annually in your mutual fund, jumping into real estate for an anticipated return of 9% hardly makes sense. You would be better off staying with what you have than taking on more responsibility for little additional return.
Most small real estate investors are able to get better than double their mutual fund rates of return by using a safe, long-term real estate investing plan. The plan is so simple that you have already heard it many times before ... buy low and sell high!
Investing With Real Estate Market Cycles
This is NOT about flipping real estate. It is about a buy and hold real estate investment strategy that requires the investor to buy during the "buy cycle" and sell during the "sell cycle."
Right now, we have entered into a buy cycle that will last for several more years, and the anticipated sell cycle won't occur for 7 or more years. By purchasing income producing properties, savvy investors will most likely earn returns that far exceed their hopes in the stock market. If you have the patience and means to wait for the sell cycle, you should strongly consider investing in real estate.
About the Author:
Joe Manausa, MBA, CRB, CRS is a long-time advocate for careful investing with a Safe Real Estate Investment Strategy. You can find a complete list of all Tallahassee foreclosures, short sales and reo properties at his Tallahassee real estate website.. Free reprint available from: How To Decide To Invest In Real Estate Or Not.
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