Words 4 U

Real estate investments are one of the most secure types of investing nowadays. We all know that stocks and bonds can be badly affected by recessions, as we had experienced during 2008. Real estate on the other hand, has the capacity to increase in value as time passes even as an effect of economic fluctuation. If you are thinking of the costs of investing in real estate, you should not worry as we will show you how to make that purchase without taking too much from your own money savings.

Real estate never depreciates in value. Of course this may sound unbelievable because several years after the sub-prime crisis, the property prices in USA had gone down up 30-50% at some places. But in the long term of 10-20 years, properties only appreciate.

This is one of the most important characteristics, which are the main reason why you should opt for this type of investment. Since no new land is created on earth every single year either through the creation of man or by nature, the demand for this limited supply of this property increases as the population of the earth also increases. The higher the demand, the higher will be its resulting market value.

You can earn profit in real estate in either of three methods: acquiring, selling, and renting it out.

There are several different methods through which you can earn a profit or income from real estate. First is by giving you better leverage hence making it desirable collateral for loans. The earning capacity for these types of properties makes it an attractive mortgage subject for banks and other financial institutions.

Secondly, this type of investment appreciates over time or increases its net worth through the years.

Thirdly, it has the ability to generate cash flow which is mainly that part of the income profit which you can spend after you have paid for your loans and other expenses necessary for the maintaining of the property.

And lastly, it is a type of investment where you can have a “say” on what happens to it. You can decide what to do with the investment and not just let others do the thinking for you as what happens with investments on stocks where a board of directors generally does the overall decisions for your investments.