A Guide to Real Estate Investing

When looking at Real Estate it's important to understand the main areas money can be made. While there are thousands of different methods, I see it as coming down to only a few different ways with many variations on these key methods. Some may even venture to say my favorite method isn't even a method, but that's up for you to decide. So be sure to let me know your thoughts.

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The one that most people have become aware of over the last five to ten years is appreciation. When property values increased so dramatically during the last several years many investors became millionaires almost overnight. Of course with the current weakening and even collapsing of many markets, many of these paper millionaires are firmly entrenched back in reality right now. With most markets these days appreciation and property value increases may be several years away before starting to move upwards again and will not reach the levels we recently saw for a long long time.

There are still high demand areas out there, but they are not as common place and require more homework by would be wealth seekers. These areas also tend to be much more expensive to start with pushing many beginning investors out of any chance of getting started.

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Another area is renovations. Increasing the value of a property by renovating and rehabbing was the subject of many popular television shows over the last several years. During the run up in property values, many people were able to build up their bank accounts quite quickly by buying cheap, renovating and then selling for top dollar in hot markets. Since this revolved around hot markets, things have changed a bit in the last couple years. Now there are more deals around than people have seen in years, but the resale market is not allowing people to make the quick sales that are so important to this business model.

Without an exit strategy for selling the property, the cost of holding onto the properties can become quite expensive. During the boom, many people were quite successful with an exit strategy of just putting up a sign, or calling a Realtor. That simply isn't enough these days.

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My favorite method for creating wealth in Real Estate is actually time. If you start looking at Real Estate as a five, ten or even 25 year investment, your whole perspective can change. Over these longer time frames values tend to increase due to inflation and the cost of living and if you can calculate which areas have above average chances of long term economic growth, you are even further ahead.

This type of investment also includes a few other intangibles like tenants, and managing properties. These require a bit of an education on as well to understand, but once the complexities of this are worked out and you have systems in place it becomes quite easy.

There is an abundance of Real Estate information out there and the different methods of making money in Real Estate range from selling multi billion dollar commercial buildings to managing properties and everything in between.

If you are considering Real Estate as a career, or wish to start investing in Real Estate you need to understand all your options. I have known investors who bought property and rented it out who moved on to be successful Realtors, I have also known Realtors who gave up selling Real Estate in order to become full time landlords.

Many investors who deal with large commercial properties started with single family homes and just continued to learn, adapt and understand how all the processes worked. Start by talking with other people in the same areas you are interested in. For this particular topic if you are looking for information about investing in Real Estate search for nay local groups that meet and talk about Real Estate, if your area of interest is buying Foreclosures, talk to lawyers who specialize in foreclosures, or call some of the classified ads and talk to the people advertising they "buy houses".

Your shortcut to success is to find a mentor, or advisor who can help guide you along the way. Why make the same mistakes someone else has when you can avoid them.