Creative Real Estate Investing

For a long time real estate investing was by far the most common in the American experience. The ideal of home ownership has been ingrained in people almost since the founding of the nation. The more broad sense of real estate investing, however is a much more varied term, meaning many different things:

Home Ownership

Home ownership is one of the safest forms of real estate investment. It should be remembered however that this investment is not without risk. Market values can fluctuate and homes can require additional outlays of money in the form of repairs and maintenance. The idea that "home prices always appreciate" has been proven a fallacy, so it makes sense to buy a home within one's means and that serves purposes other than just an investment.

Rental Properties

After home ownership, this is likely the most common form of real estate investment. In addition to being plagued by all the dangers of home ownership, it additionally requires management of tenants, marketing efforts and sensitivity to the rental market. Many writers agree that it should not be undertaken except by those with some knowledge in maintenance work, as there are many hidden costs to owning a rental property.

Rural Land

Another way to invest in real estate is to purchase rural land. Rural real estate tends to operate on slightly different boom and bust cycles than residential real estate, however it is still subject to the same price fluctuations and dangers. Additionally there is an inherently lower liquidity because of the smaller pool of buyers interested in such properties.

"Flipping" Properties

During real estate booms there often becomes investment in "flipping" properties. This is buying a house that needs work or improvement, quickly making those changes and then selling it at a higher price. While the short duration of these investments can make them less subject to changes in the housing markets, they generally require expertise in the improvements to be made. Neophytes often wind up finding themselves spending far more money and time than they intended improving the property.