Perhaps a better question might be: “Why invest in ANYTHING?”
I believe that as long as an investor begins in the right place and keeps appropriate perspective, investing is still a useful pursuit.
AAACK! My “U” is misbehaving on my keyboard . . .
Seth Godin wrote a post today entitled “Short Term Capitalism” in which he deals nicely with the “beginning in the right place” part of an investment strategy.
What are your investment goals?
Seth suggests that if they (goals) are short term (Large) gains, you’re setting yourself up for a fall.
Think longer term.
Is this for retirement?
To protect your savings from yourself?
To build money for kid’s (or your own) college?
To “park” your money in a safe place until the economy finds more stability?
Here’s my observation:
Even the BANKS are not investing in financial instruments as they have in the past . . . nor are they investing in their customers as they hold on to their money by making it more difficult for small businesses to secure any kind of financing.
People with money are waking up and smelling the coffee and are investing in REAL ESTATE.
With real estate values appearing to be finding the bottom in many areas, possibilities abound.
The rental markets are much STRONGER as many former home owners have become reliable renters. Rental rates in Middle TN (And likely elsewhere in the country) are on the rise as the inventory has been gobbled up by this new profile of renters who had bad luck and found themselves up-side down but hold strong jobs and are stable people.
Of course, everyone has a story about a real estate investment gone bad – Horrible tenants – having to sell for a loss etc . . . None of that has to happen!
I believe the only real estate investors who lose are the ones who follow the “Short Term Capitalism” approach that Seth mentions . . . Looking for a quick buck without regard for long term strategy.
I believe that with some careful long term goal setting, a dose of patience, and some creative strategizing with a Real Estate Sales Professional (We have 9 of those at Pareto Realty :-0), even a “Rookie Real Estate Investor” without a ton of cash can build some serious wealth in less than 10 years.
This simply involves “Buying the RIGHT property RIGHT” NOW . . .
and strategically buying more RIGHT properties in the future.
Any “Right” property must “cash flow” and all proceeds “turn back into the investment” to create the “Snowball Effect” . . . In essence, the properties pay off their own (and each other’s) mortgages.
Later . . . With strong equity in these investment properties, this savvy investor can sell them to “cash out” the return . . . or can likely live reasonably well on the monthly rental income.
Over time, Real Property has ALWAYS been a strong investment for smart people who understand the futility of “Short Term Capitalism Strategy”.
If this post has piqued your curiosity and you have an interest in learning more about real estate investing, your next step should be to meet with your local Real Estate Sale Professional.
We at Pareto Realty are poised and ready to help you start your snowball here in Middle TN.
If you are not in TN, we can help you find the right local agent for you in your city.
Coffee cup’s empty . . . Time to “start the blender” (Wake up everyone in the house).
Hope you have a great week!