Business & Finance Investing & Financial Markets

Buy and Hold - Real Estate Investors Know Best

The main advantage real estate offers to those investing is leverage.
Using a small amount of money, or even no money down, in some cases you can buy real estate worth tens or hundreds of thousands of dollars.
The second advantage is the price appreciation that occurs in real estate, you may doubt this right now, but as a buy and hold investor you look at a 10 year property value appreciation, in which central Pennsylvania (Harrisburg, Lancaster, York) real estate investors saw a gain of 10-12% at current market value.
A true retirement plan.
The third advantage these savvy investors take advantage of is rehabbing a fixer upper, and if acquired properly will put a quick 20-30% of equity in your pocket to start the leverage ball rolling.
Multi unit buildings, small apartments, and single-family homes that you rent are good investments, because there is always a shortage of housing, and there are always people who can afford to rent but cannot afford to buy a home.
There could not be a better description of the current housing market.
The high price of home ownership, and the fact that it is generally undertaken with borrowed funds, there will always be renters, those who are afraid of the financial obligation or unwilling to leverage themselves into ownership, or today just plain old fact the lack of bank lending.
Pricing of real estate is also boosted by the simple law of supply and demand.
The supply of rental properties is growing slowly, and the population that is currently in need of them has exploded, through both the record numbers of foreclosures, and the tightened credit market.
As long as demand for rental housing continues to outrun supply rental rates will creep up, and market time of those rental units will come down.
There are a few ways to maximize this real estate investing strategy, which we will discuss later - So Stay Tuned -, but even without, in my eyes are the best long term "TRUE" wealth building investment.


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