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The Basics of

Real Estate

Investing

By: Christine Brady

Real Estate Solutions Co.

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If you are looking in to real estate investing, understanding the basics of investment properties is essential. The definition of what constitutes property makes investing in it a whole lot more lucrative. Property is anything and everything that can be owned, either by an individual or a group. Real estate property, in particular, is defined as land and all of the physical and man-made developments that are permanently associated and attached to it. What does this mean for real estate investing? Well, it pays to know the basics, since real estate investing is not to be taken lightly. Real property includes not only the ground itself and all that is connected to it, but the air above it and the minerals below it. When you buy property, you are becoming responsible for the land, trees and mineral rights, if included. All property not defined as real estate is personal property.

Real estate investing has evolved over time. In the current economy, more people are able to purchase property in addition to their family home. People now have the financial means to proceed beyond the use of real estate for the sole purpose of supplying their family a place to sleep, play and eat. Now, it is increasingly possible and desirable for individuals to buy real estate as an investment. Real estate investing can be a wealth creator and a depository of value that can effectively convert the results of their strategic efforts into a tangible, profitable, real property asset.

A real estate investment can be defined as the implementing of financial resources for the purpose of preserving and increasing capital and earning a profit. Nearly everyone has made or will make an investment of some kind or another throughout the course of his or her life. All for the purpose of accumulating savings and pursuing other ventures in search of gaining a better quality of life.

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Frequently, making an investment also involves the setting aside for a time some present comforts in anticipation of earning future benefits. Forgoing instant gratification, while unpleasant, is often necessary in order to sufficiently accumulate the savings needed to acquire real estate property. Moreover, money isn't the only component typically applied to a real estate investment. One's time and effort, referred to as sweat equity, can also be very much involved.

Here are some advantages of real estate investing:

Investing in real estate is as advantageous and as attractive as investing in the stock market. I would say it has three times more prospects of making money than any other business. And that could be a lot more or a lot less! Having said that, since it is equally guided by the market forces; you cannot undermine the constant risks involved in the real estate investing. As with any investment, there are risks. But, as far as investments go, real estate has historically been safer.

Which brings me to the next point - real estate investments are less risky!

As compared to other investments, there is less of a loss involved in a real estate property. I will not get away from the fact that just like any investment you make; you have the risk of losing it. But, real estate investments are traditionally considered a stable and rich gainer, provided if one takes it seriously and with full responsibility. The reasons for real estate investments becoming less risky primarily relate to various socio-economic factors, location, market behavior, the population density of an area; mortgage interest rate stability; good history of land appreciation, less of inflation and many more. As a rule

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of thumb, if you have a geographical area where there are plenty of resources available and low stable mortgage rates, you have good reason for investing in the real estate market of such a region. On the contrary, if you have the condo in a place, where high inflation is killing you, it is far-fetched to even think of investing in its real estate market.

Also on the plus side of real estate investing is the ability to predict the future - well, not really, but in a way, yes. Buyers have a ton of resources at their disposal, see buying a house. There are ways to see what has sold in the area you are looking at - you can look at prices and where the neighborhood has been for the last few years. So, in a way, you can look at the data and predict where it is going.

The resources necessary to reap the intended rewards from real estate investing must be budgeted and planned for in advance. Look at your time, your money involved and your effort, then you can determine if real estate investing is something you want to move forward with. Keep in mind that the rewards can be substantial, indeed. To best optimize the use of one's limited resources when investing in real estate, I highly recommend that you acquire and carefully apply the expert instruction found on this website. There is a wealth of information here and you will discover tips you did not know even existed.

Also be sure to check out our free guide on how to sell a house - see what home sellers are doing to sell a house.