You’ve thought about real estate investing – go on, admit it. Even if it was a wistful little passing fantasy about buying that little rundown house you saw – because all Romeo Abdo it really needs is a coat of paint – and selling it for a big profit. Or maybe you’ve considered purchasing rental property ‘so that the rents will cover the mortgage’. Why invest in real estate? You’ve already thought about part of the answer – there’s excellent potential for profit in real estate investment.
Real estate investment is a proven method of making money and increasing your net worth – with a few caveats. Your profit will depend on your knowledge, your hard work and your ability to plan. Real estate investment isn’t a magic formula. No matter how easy the late-night millionaire’s club makes it look, it’s not a get-rich quick scheme. It could take months before you buy your first property, a year before you sell one, and longer before you’re realizing a consistent, comfortable income. To quote one major real-estate investment mogul, an overnight sensation in the real estate market is one that takes five years.
So why invest in real estate? Simply put, it IS a career choice with potential profit whose only real limits are those you impose on yourself – and that’s how you have to treat it. That means that it’s up to YOU how much you make. You control your profits by learning all you can about investing and real estate, studying loan structures and foreclosure laws, understanding the psychology of buying and selling, knowing the rules and responsibilities of holding tenant property.
If you know what you’re doing, you are nearly guaranteed to make money. Unlike many other investments, you can count on one thing with real estate. You CAN eventually turn a profit on almost any property you own – as long as you paid a reasonable amount for it in the first place. Real estate values rise and fall with the economy. If real estate prices drop, you can count on the fact that they WILL rise again.
If you’ve invested in rental properties, you can count on a steady income from them – as long as they are well-maintained. It’s another truth of real estate – people will always need housing. There is always a demand for what you’re selling. And even in the toughest markets, rental prices seldom drop more than a few percent. As long as you can keep your rental units full with paying tenants, you can count on the income from those units to cover mortgage and upkeep costs and make a profit.