From the beginning of time, man has always wanted property of his own. Pre-historic man probably wanted a private cave to get away from the rest of the pack
Today, everyone would like to own an unpolluted beach front property in California or the equivalent. In other words, throughout history, real estate investing has been the one investment that has never gone out of style. Of course, like any other market, this too has its highs and lows, but historically speaking gold and real estate investing are the two forms of investment that have stood the test of time as being safe and reliable with a long term capital appreciation almost guaranteed.
One major form of real estate investment is done by property development firms. These companies usually buy property and carry out development, creating prime real estate that is later sold for a profit. There are two major forms of real estate investment and the first one is by large companies who invest in land using their surplus profits or keep the funds away in a secure location. Usually, this is done by investing in commercial property.
Residential property, when bought in the form of single plots of land or structures is usually purchased by individuals. This is done to both, provide a home for a family as well as a form of investment. While, till a generation or two ago, a family bought property to make a permanent home for themselves, this situation has undergone a considerable change over the last few years.
The 1950s and 1960s Baby Boomers bought what is generally known as the American Dream. This is usually a house located in suburbs that has white colored picket fences and where the parents could live together with their children comfortably throughout their lives.
Today, the modern family buys real estate for the medium or even short term. The primary focus is still on finding a home for the family, but the home may be only for a few years. Modern lifestyles preclude the setting down of roots over a long period of time. It is common now to find teenagers who have been to school in 3 or 4 different cities " something that one normally found only with the children of military personnel in the past.
Why is purchasing property still a very popular consideration? Instead of buying the property why not rent? Two reasons can explain this. First, there are no guarantees that the family will stay put in one location for a long time. Other reasons such as economic uncertainties, better career opportunities or the large scale shakeup in the job markets may make it hard to predict the period of stay. It is quite difficult to sign a lease when the family is not sure of the period they will live in a place. If they move from the rented home, they lose all the money they had used as rent.
Secondly, and perhaps more importantly, buying real estate is seen as a good investment. Even if the family has to move after just a few years, the chances are that they will be able to sell off the property at a profit which will help them to settle in their new location.
In many cases, this may not be the ideal scenario and it is evident in the current unstable state of the housing sector and the economy in general. This should however not be a deterrent because the downturn is expected to be a passing phase with things expected to pick up very soon. There is a much greater chance of property prices going up than falling after the recession subsides in the coming months and this is good news for investors. For this reason many families opt for pre- construction or off plan real estate, which have significant discounts. In the long run this type of investments will ensure a greater profit margin during the re-sale of the property.
Investment in real estate differs significantly from other investments such as stocks or gold. Real estate provides adequate shelter for people to live in and this is not the same with the precious metals or share certificates. This is one of the main reasons why investing in the properties market is a popular investment for today and many years to come.
Today, everyone would like to own an unpolluted beach front property in California or the equivalent. In other words, throughout history, real estate investing has been the one investment that has never gone out of style. Of course, like any other market, this too has its highs and lows, but historically speaking gold and real estate investing are the two forms of investment that have stood the test of time as being safe and reliable with a long term capital appreciation almost guaranteed.
One major form of real estate investment is done by property development firms. These companies usually buy property and carry out development, creating prime real estate that is later sold for a profit. There are two major forms of real estate investment and the first one is by large companies who invest in land using their surplus profits or keep the funds away in a secure location. Usually, this is done by investing in commercial property.
Residential property, when bought in the form of single plots of land or structures is usually purchased by individuals. This is done to both, provide a home for a family as well as a form of investment. While, till a generation or two ago, a family bought property to make a permanent home for themselves, this situation has undergone a considerable change over the last few years.
The 1950s and 1960s Baby Boomers bought what is generally known as the American Dream. This is usually a house located in suburbs that has white colored picket fences and where the parents could live together with their children comfortably throughout their lives.
Today, the modern family buys real estate for the medium or even short term. The primary focus is still on finding a home for the family, but the home may be only for a few years. Modern lifestyles preclude the setting down of roots over a long period of time. It is common now to find teenagers who have been to school in 3 or 4 different cities " something that one normally found only with the children of military personnel in the past.
Why is purchasing property still a very popular consideration? Instead of buying the property why not rent? Two reasons can explain this. First, there are no guarantees that the family will stay put in one location for a long time. Other reasons such as economic uncertainties, better career opportunities or the large scale shakeup in the job markets may make it hard to predict the period of stay. It is quite difficult to sign a lease when the family is not sure of the period they will live in a place. If they move from the rented home, they lose all the money they had used as rent.
Secondly, and perhaps more importantly, buying real estate is seen as a good investment. Even if the family has to move after just a few years, the chances are that they will be able to sell off the property at a profit which will help them to settle in their new location.
In many cases, this may not be the ideal scenario and it is evident in the current unstable state of the housing sector and the economy in general. This should however not be a deterrent because the downturn is expected to be a passing phase with things expected to pick up very soon. There is a much greater chance of property prices going up than falling after the recession subsides in the coming months and this is good news for investors. For this reason many families opt for pre- construction or off plan real estate, which have significant discounts. In the long run this type of investments will ensure a greater profit margin during the re-sale of the property.
Investment in real estate differs significantly from other investments such as stocks or gold. Real estate provides adequate shelter for people to live in and this is not the same with the precious metals or share certificates. This is one of the main reasons why investing in the properties market is a popular investment for today and many years to come.
About the Author:
Dario Dingwalls property investment club offers property investors an exclusive way to build their property portfolio up in the highest yielding US property markets. Dario has offered to provide our readers with a free property market review on one city currently offering superior Returns On Investment. All you have to do isclick on MyRealEstatePortfolioUSA to get your copy.
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