Should You Invest in Real Estate?

Should You Invest in Real Estate?

Should you invest in real estate? Yes, at the right time and in the right place. In the past, a greater percentage of individual investors in real estate have probably made money than have investors in stocks.

I am completely convinced that every able-bodied citizen should work toward either owning a home, a savings account, or common stock.Two-thirds of American families report they own their own homes.


Home ownership has always been a goal of Americans. Their ability to obtain long-term borrowed money through mortgages and the like, with only a small down payment as equity, has created the leverage necessary for Americans to make large real estate investments possible.

Time and leverage have usually paid off. However, this has not always been true. People can and do lose money in real estate if:

1. They buy in an area that is slowly deteriorating or is not growing.
2. They buy at inflated prices after several boom years and just before severe economic setbacks in the economy or in the particular geographic area where they own real estate. This might occur if there are major industry layoffs or the closing of an aircraft or steel plant
that is an important mainstay to a local area.
3. They get themselves personally overextended with real estate payments that are too high, and their source of income is reduced by the loss of a job or an increase in rental vacancies, if they own rental property.
4. They make a poor initial selection, the area deteriorates, or they're hit by fires, floods, tornadoes, or earthquakes.

They say there are three golden rules to buying real estate—location, location, and location!


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