Real Estate: A Strong Investment

By Naomi Warne

Description: Even in uncertain economic times like these, history
shows that real estate is one of the soundest investments a family
can make. Also remember that the stock market is not the only place
where people can make their fortunes. And also, you'll hardly
ever hear of real-estate investors who've gone bankrupt, unlike
stock market investors.

Even in uncertain economic times like these, history shows that real
estate is one of the soundest investments a family can make. During
the Great Depression of the 1930s when the stock market plummeted as
much as 89 percent, housing prices dropped only 39 percent. So,
according to most of the research on housing trends, prices
continually stay at the same level as, and most often appreciate
faster than the rate of inflation. In fact, the prices of houses
actually increased by 10 percent during the economic recessions of
the mid-19702 and the early 1980s.

The last downturn of the global stock market resulted in millions of
investors who got their fingers burned. Overnight, life savings were
eaten away, retirement funds went into decline and the economic
forecast for all of us who had any money invested in stocks and
shares was gloomy, to say the very least. And as a direct result,
investors sought alternative asset classes to invest their hard
earned money in. This has led to a global boom in real estate
markets and property prices, and has spawned a generation of budding
real estate investors.

However, the opportunities to make big, quick profits in residential
real estate tend to come and go. If the local market is hot,
families might get to buy and sell a house at a profit. but, if the
market is not so hot, there are chances that you'll have to hold
on to the house for a longer period of time before selling it or at
least till the market turns.

Tips for First-Time Real Estate Buyers
If you play well, you can be the big winners in this current
environment of boom. However, it's important to draw up a good
budget to help you decide what you can afford. And, once you've
determined a price and picked your desired community, you can shop
around to find the best house within your budget.

However, for those of you who're still uncertain about how to go
about it, there are five things that might just help you close a
great deal. While deciding on the house to invest in, never make the
mistake of assuming anything. Instead get help from an expert if
you've any doubts. Also, it's important to set a realistic
budget and stick to it. You also need to consider every single area
of cost and payment to make sure that there are no nasty surprises
on the way.

More than Just an Investment
Residential real estate is more than just an investment. For
example, if you purchase a vacation home, it will not only be a
great deal when housing prices move upwards, but it can also be a
place for some great vacations for your family and you.

Also, there is another advantage. The federal government believes
that home ownership is so important to the future of our country
that it has allowed mortgage interests to remain a substantial tax
shelter for families. So, homeowners are allowed deductions on their
property taxes. And, the profit on the sale of your home remains tax-
free as long as you buy a house for a greater or equal price.

So, before you decide that residential real estate investment is not
exactly your cup of tea, re-examine the financial benefits of owning
your own home. Also remember that the stock market is not the only
place where people can make their fortunes. And also, you'll
hardly ever hear of real-estate investors who've gone bankrupt,
unlike stock market investors.

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Author's Bio:
Naomi Warne of Around the Corner Real Estate Dealers, Sydney, has
helped her clients with profitable property investments and numerous
tax benefits. Having started as a Real Estate Agent, Naomi has
established herself as an analyst and Property Consultant,
Australia. www.mortgagemall.com.au