Real Estate Investing | Property Investing Guide | Home Investors Book | Investments in Housing Business Plan

SemperFidelis by SemperFidelis
Last updated: 06/25/2011

Home Investments Primer for Real Estate Investing

An introduction to investments in real estate for those wishing to get started in real estate investing. Real estate investing involves the purchase, ownership, management, rental and/or sale of real estate for profit. Improvement of realty property as part of a real estate investment strategy is generally considered to be a sub-specialty of real estate investing called real estate development.

Home Investing Defined

Real estate investing involves the purchase of real estate for profit. Profits are accumulated slowly by renting out properties in a cashflow method, or are generally improved and resold for a capital gain. In addition, real estate investors may wholesale properties as a means to make profits.

Investing Advantages

There are many gurus out there that contend that real estate is a panacea where you cannot lose money. Although this is false, there are a number of advantages to investing in real estate. The first big advantage is that it is an extremely expensive product. Each sale you make generates more profit potential for this reason.


Leverage, or the ability to borrow based on the value of the property, is probably the second greatest advantage. It is much easier to finance real estate than any other product. While investing in most assets requires the purchaser to have the full purchase price available for the asset, in real estate investing, one only needs to have a fraction of the purchase price available (like 5%, 10% or 20%) as a down payment. Therefore, real estate, although incredibly expensive, is still easier to buy than say, a piece of industrial equipment of the same value.


Local advantage is rarely discussed but it stands to reason that you know your neighborhood better than a real estate investing expert would if they were in another part of the world. This creates an advantage the beginner can exploit in his market. The bulk of the world's assets are in real estate.


One way a beginner can get started in real estate investing without taking on any personal risk is to 'bird dog', or hunt for good deals, for another more experienced investor. This allows the beginner to learn to find and recognize value.

Investing Disadvantages

Real estate is an illiquid investment that needs maintenance and taxes to be paid. A balanced investment portfolio has some liquid assets that can be quickly converted to cash to sustain the real estate when its returns are not sufficient to pay its recurring costs.


During a real estate boom, speculators can be prone to make purchases without precalculating the costs involved in the purchase and for the ongoing costs of a property. The real estate can then sometimes work against them instead of for them, realizing a loss at resale.


There is no guarantee that values will maintain themselves as society changes; megatrends can cause large scale changes. An example is the period from 1815 to 1914 in the U.K., during which real estate values did not increase although the society as a whole made massive economic progress. See Wikipedia, Real Estate Investing.

P.S. If you buy something from this page...

Acumen FundSave The Children... you'll automatically be making a donation to Save The Children, working to solve global poverty. As a matter of fact, all of our lenses donate to Save The Children or The Acumen Fund.

Doesn't that feel good?

We Squidoo for charity! One of the coolest things about Squidoo is the opportunity provided for lensmasters designate all or part of their proceeds to charity. Consider creating a lens today for a charitable cause.

Best Sellers on Property Investing

Loading
Loading
Loading

Favorite Articles on Investing in Property

Choosing Investment Partners
Picking the number and the right investment partners.
Investment Expert
Become an investment expert.
Pre-construction Investing
Investing in homes prior to their construction.
Investing IRA Funds
Choosing real estate as a vehicle for IRA investing.
Know Your Investment Type
What kind of investor are you?
Successful Investing Habits
A consideration of good investing habits to have.
Investment Hunting
Where and how to find the right property investment.
Investment Research
Good research accompanies a good investment.
Investing Cash Free
Investing in properties cash free.
Investment Strategies
Strategic investing management.
REITS Investing
Investing in Real Estate Investment Trusts.
Enhancing Investments
Enhance your investment.
Short Term Investor
The short term investor.
Investment Framework
The framework for your investment success.

Real Estate Investing on YouTube

Loading

Property Investing Daily News Headlines

Loading Fetching RSS feed... please stand by

Real Estate Investing Reader Feedback

Another Quality Lens By Joe and Colleen Lane!

You do not need a Squidoo account to leave feedback, however,
consider signing up today and creating your first lens! It's a hoot!

submit

Investing in Homes Blog Posts

CT REIA Announces February 2012 Real Estate Wholesaling Seminar With Zack ...
This real estate investing seminar will take place from 9:00 am to 4:00 pm at the Four Points Sheraton,...
Real Estate Investing Websites With Social Media And Search Engine Marketing ...
A real estate investing company that also produces real estate investor websites, http://www.RealEstateInvestorsWebsites.net,...
Austin RENC to Use Black Box Social Media to Promote Real Estate Investing Club
Austin RENC hires Black Box Social Media for social media marketing promotion of their real estate investing...
Apollo Has Difficulty Landing Real-Estate Funds
A Calpers spokesman said the pension is focusing on separately managed accounts rather than funds, and...

Another Quality Squidoo Lens by Joe and Colleen Lane

Tri City Wa Real Estate

Tri City Wa Real Estate | Washington Real Estate News

Creative Commons License Some of this work is licensed under a Creative Commons License. All original work, design, and imagery is Copyright© 2007-2011 The Lane Real Estate Team.

SemperFidelis' Latest and/or Greatest

SquidooRecycling | World Vision | Flipping Real Estate | Jesus Christ Images | Carrie Underwood | Lizzie Stanton | Olevia 747i LCD HDTV | Muhammad Ali | Best Real Estate Websites | Greatest Real Estate Agent In The World | Real Estate Closing | Hillary Duff | Shih Huang Ti | Ford Mustang | Herbert Hoover | Bible Study Fellowship | Aaliyah | How To Hire A Woman | Save The Children | Christmas Forums | Mike Huckabee | Buy Wii Online | Maria Sharapova | Weirdest Photo Ever | Acumen Fund | Evel Knievel | Mother Teresa | Squid Angel | Michael Jordan | Traffic From Image Searches | Free Squidoo Images | Squidoo How-To Reference | Squidoo Lens Candy | How To Prt Scr | Michael Jordan | Maria Sharapova PowerShot Videos


Consider Joining One (or all) Of Our Groups Today:

This UpMarket page written by

SemperFidelis

Colleen Lane on Twitter | Colleen Lane on Facebook | Colleen Lane LinkedIn"A Dad, Mom, 5 kids, and we're haven' fun!" Squidoo's fantastico! We are able... more »

Deluxe. Remarkable. Creative. Unusual. Successful. Upmarket businesses push the envelope -- does yours?

Connect with UpMarket

This author recommends...