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. Real estate is an asset form with limited liquidity relative to other investments, it
is also capital intensive (although capital may be gained through mortgage leverage) and is highly cash
flow dependent. If these factors are not well understood and
managed by the investor, real estate becomes a risky investment. The primary cause of investment failure for real
estate is that the investor goes into negative cash
flow
for a period of time that is not sustainable,
often forcing them to resell the property at a loss or go into insolvency.
Flipping houses is a great way to
make money. But this process is not for the faint of heart. Make sure you have
a knowledgeable contractor and a reliable crew working with your best interest
in mind and always get an inspection before purchasing.
If you plan to become a landlord
make sure that you screen your tenants by doing a credit and criminal
background check, always get a deposit equal to the first month’s rent in
advance and use a ligament lease agreement not a hand shake.
