Sunday, July 5, 2009

Why invest in real estate?

There are many reasons for people to invest in real estate. I could sit here and quote all the famous lines about how god isn't making anymore land blah blah - the reality is that real estate offers a tanglible asset. Tanglible assets with real liquid resale value are far lower risk than something that is intangible like a stock. With a lot of investments you are relying on the integirty and skillset of the management running the investment than you are the actual product/service they sell. Any good idea or product can be completely messed up by management. You also have issues of mismanagement and fraud etc. You can still encounter this type of situation if you are dealing with an investment firm that specializes in real estate they would still be capable of messing things up. In this case it is different than directly buying real estate yourself. In the following weeks I will discuss the pros and cons of both types of real estate investments.