Many of the richest people in the world, have made their money through real estate. It is estimated that 80% of the world's wealth is held in real estate and is owned by less than 20% of the population.
Here are a few tips to remember if you think about investments:
Understanding the timing and the cycle of the market is a key component. What is the trend, is it going up or down?
How to analyze real estate numbers?
Appreciation, Cash flow, Loan reduction and Tax benefits and how they work together to produce a rate of return on equity that you have in the property.
You have to figure out the appreciation on the property vs how hard is that money in the property working for you.
Having an understanding of the economic environment, the diversity and what is going to be the outcome of my investment today tomorrow and in the future.
Mortgage interest rates, affordability, supply and demand,demographic information, commercial real estate and job market
Smart investors take the time to study both macro and micro economics while purchasing real estate.
Macro economics-study of the economic forces that impact the health and stability of things, such as recession, depression, war time ..
Micro economics-study of individual sectors in local and regional areas, age of the general population, diversification of the job market, unemployment rates, affordability, supply and demand of houses,vacancies ....
In the end there is money to be made in real estate but proper research , common sense approach and patience is required.