Real Estate Assets that Build Wealth

Economists say a variety of things about the economy from "it is recovering" to "it will take a double dip." In the end, it seems that it is probably a little bit of both.

On the good side, the stock market is stil gaining traction and will be positive. The housing market will be hot in some areas, but coller in other areas. As I have written before, real estate is local - state to state, north to south, city to city, neighborhood to neighborhood. It depends o supply, demand, lending environment, and inventory.

On the other side, unemployment continues to be negative and probably stuck where it is for a while, and the deficit continues to grow. These are all things that indicate a slower recovery.

Real Estate Assets that Build Wealth

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Assets (stocks, bonds, gold and real estate) are investments vehicles that will possibly appreciate over time. Wealth is created when money you invest works for you, not when you have to work for your money.

You need assets to create wealth and real state is one of those assets. Each asset has to be judged: value, time and money. With real estate, the Value is in the land. Land is a limited resource, and if well-located, it has precious value. (Witness beach front properties in California.) If there is more demand than supply, values is increased. When you invest in real estate, you have true equity and the power to control the asset (when to sell, refinance, or leverage.) If you buy now with LOW interest rates, the value increases. And remember, real estate takes tiime to appreciate - you should plan on holding for 5-7 years.

Real estate investing is not just about buying into the American Dream, or buying in the right school district or community. These are just the icing on the cake. Think of real estate as an asset. If you do, then you will see the magic in this investment: compounding value over time, low rate of money, and, with inflation, the further increase of value over time.