Real Estate

Real Estate: Probably one of the most discussed topics in the world today - and for good reason. During one's lifetime there will be at least one Real Estate transaction, probably many more. This could be in the form of buying a house, renting an apartment, or purchasing raw land.

Throughout history, real estate has been one commodity that over a period of time rises in value regardless of what happens to the stock market or the economy in general. Granted this evaluation is a slow process, in the range of about 5% to 7% per year but it does go up. Most investors look for an investment that resembles a get rich quick program. After all buying a commodity and then sitting on it for a few years is rather boring.

All Realtors and Brokers will tell you that your home is probably your biggest asset. That depends on how you interpret an asset. According to the authors of the book "Rich Dad, Poor Dad" an asset is defined as something that puts money in your pocket. Liabilities take money out of your pocket. It goes without saying that purchasing a home will be a major liability.

If you purchase a home wisely, it could well become an asset when the property is sold. Let's face it, the real reason you buy a home is for the freedom to live the way you want too. You are not concerned with landlords and their directives. It is also important to note that your principle and interest payment remains unchanged for as long as you own your home (provided you obtained a fixed rate mortgage). No rent increases every year. Another positive note is the tax deduction that is allowed on the interest portion of your payment.

If you put aside your home, purchasing real estate can be considered an asset if you invest in income producing properties, such as rental property, commercial property and apartment buildings. It is wonderful when you can buy property and let someone else pay for it.

Real Estate can be subdivided into several products: Commercial, Land Development, Leases, and Real Estate Investment Trusts (REIT's).

The commercial industry is for the more financially endowed individuals, most likely corporations. Those companies specializing in commercial real estate know the risks involved. A simple lease can be negotiated for up to a year and collapse overnight. Trying to read a contract for a commercial purchase or lease is a little like reading a phone book - enormous and dull. The best way for individuals to get involved in commercial real estate is through a Real Estate Investment Trust (REIT). These trusts are corporations whose sole function is buying, selling and managing real estate. These companies tend to specialize in commercial property but could become involved in housing developments and condominium complexes.

Another specialty of real estate is raw land. Again, for the average individual this is normally related to a small plot for building a home or some acreage for farming. Getting into site development is another whole business in itself.

Most of us are involved in Residential Real Estate. For this web site we will be concentrating on this aspect of the business. After all, many of us are 'experts' in this business, or so we think. We will try to cover some of the challenges that come up when you start looking for your dream home. We may even give you a few good ideas.