Real Estate Investing
Posted by resident
Real estate investing involves the purchase of real estate for profit. Profits are made by renting out properties or improving it then resell it for a capital gain.
Advantages
The biggest factor in marketability of an investment is supply and demand.
The first big advantage is that it is an extremely expensive product. This means that in each sale you make, you generate more profit potential.
Second advantage is that it is much easier to finance real estate than any other product as you have the ability to borrow based on the value of the property, where only a fraction of the purchase price is needed as downpayment.
Knowing your neighborhood better than a real estate investing expert is an advantage especially if the REI experts were in another part of the world. A beginner can exploit this advantage in his local market.
Another way for a beginner to get started in real estate investing with minimal risk is to hunt for good deals for another more experienced investor. This way, a beginner learns to find and recognize value.
Disadvantages
Real estate needs maintenance and taxes to be paid. During a real estate boom, speculators can be prone to make purchases without pre calculating the costs involved in the purchase and for the ongoing costs of a property like maintenance and taxes. The real estate can then sometimes work against them instead of for them, realizing a loss at resale.
Have you ever thought of investing in real estate lately? Would you like to share your thoughts by leaving a comment below?
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