Investing in Real Estate

Investing in Real Estate

Posted on 03. Jul, 2010 by in Real Estate

Investing in real estate is quite possibly one of the oldest investment vehicles there is.  Even in ancient times someone could purchase a piece of land, make improvements to it and then turn around and sell it for a profit.  This was done countless time by turning wilderness into farmland, draining swampland for new home construction and using irrigation to turn dry land into land suitable for many uses.  The strategy of making improvements to land for a profit have been around for centuries.  The only think that’s changed is that we now use machinery to make these improvements.

Making improvements to land is only one of many techniques that can be used to invest in real estate.  Investing in commercial real estate is another such technique.  This technique is very popular, and for good reason.  You simply purchase a piece of real estate with an existing structure and rent it out to one or more tenants.  Profit is realized in this simple strategy from the monthly lease payments you receive in addition to the appreciation in the property’s value over time.  Real estate owners are also able to shelter income from taxation by depreciating the building’s value over a few years.  And if the owner chooses to do so, he may sell the real estate after a few years and realize a capital gain.

Investing in residential real estate is another great investing strategy.  Many people do so by purchasing single family homes, small apartment buildings and even duplexes or triplexes to rent out to tenants.  The same benefits of investing in commercial real estate can be realized with residential real estate.  As an added bonus, if you buy a duplex or triplex, you could live for free in one of the units by renting out the other units and using the income to cover your monthly lease payment.

So, how do you obtain an education in real estate investing?  It really isn’t something you need to go to school for.  Although you can take a course to become a real estate agent in your state, it really isn’t necessary if you want to purchase real estate for yourself as an investment vehicle.  To start investing in real estate, you only need to go as far as your local library or bookstore.  There you will find entire sections of books on investing, many of which involve investing in real estate.

Real estate is a great investment vehicle that has been around for thousands of years.  It still makes a lot of sense today.  In today’s world of stock market uncertainty, you can still count on real estate as a solid investment.

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