Investing in Real Estate

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The real estate investments sector — both commercial and residential — is often looked upon as a promising and relatively stable sector. Historically, at least until recently, real estate investments were looked upon as promising and safe choices that witnessed nothing but growth. While there is some truth to this recognition, real estate investments, in recent years, have become just as prone to volatility and market force influences as any other investment class.

Despite these changes in market conditions, over a long period of time real estate investments could prove to be viable and profitable investments, especially if one makes the investment during early stages. Apart from the timing of the investment, the location and growth potential of the community where real estate investments are made is very critical, and is in fact the most critical component of a successful real estate investment strategy.

Done right, real estate investments could not only demonstrate appreciation and capital gains, but also offer the possibility of earning a fixed revenue stream in the form of rental income and other revenue gains that are typical of the real estate sector.

Over the years, savvy real estate investors, such as Trump, have made billions of dollars in profits. While not everyone can become Trump in one lifetime, there are some powerful real investing strategies that, if adhered to, can generate substantial capital gains. The reverse holds true as well and immature real estate investment decisions could result in unimaginably large losses.

In addition to direct real estate investments in properties, investors can also benefit from the services of Real Estate Investment Trusts (REIT) which pool in investments from many investors to recruit professional real estate investors. The profits are then re-distributed to investors. Time share, commercial property, hotel rooms, and other forms of real estate investments are becoming increasingly popular these days.

In addition to buying property from sellers (or through brokers), many real estate investors take advantage of auctions of foreclosed homes to buy property at relatively low prices and resell them for a large profit. Foreclosure specialists often deal with such investments and reap millions of dollars in investment gains.

Disclaimer: This article is not intended as investment advice. You must check with a qualified professional before making any investment decision.

Photo by: woodleywonderworks

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