Investing in real estate is not an easy task and therefore carries certain inherent risks. However, compared to investing in just about anything else, real estate is relatively low risk for the simple reason that you can control most elements of a real estate investment. For example, you have full control over where you invest (areas with measurable and consistently higher growth rates than other areas). When to buy, what to buy, and through which lenders you get your funding. you can control which tenants you rent your property, whether or not you want to make any improvements to the property, and when (if ever!) you want to sell.Plus, real estate is relatively simple to learn (no three-year college course years required), easy to practice (you don’t need to be certified in any way as a prerequisite to investing in real estate), and easy to maintain (hire a property manager)
Perhaps most importantly from an investment perspective, it’s relatively easy to make a lot of money investing in real estate, a fact that’s made all the more attractive since you don’t need a lot of capital. to achieve this. To be sure, there are plenty of people out there making obscene amounts of money from things like stocks (think Warren Buffet), currencies (George Soros), high tech (Bill Gates), cars (Henry Ford ), fashion (Ralph Lauren) and in a host of other businesses. However, we argue that if you take groups of 1,000 people, all chosen at random, and form one group to invest in stocks, the next in automobiles, the next group to invest in currencies, the next in high tech, the next in automobiles, the next in fashion and so on, and you also take a group of 1,000 people and train them to invest in real estate, and then after ten years, the real estate investors will on average have greatly outperformed all other investors.
Not only will the average performance of real estate investors be much higher, but the standard deviation of performance will be much lower, meaning the numbers won’t be skewed by one or two hyper-success stories that boost the average. but leave the masses to the will of chance.
The few hazards that exist when it comes to investing in real estate are for the most part easy to overcome. Indeed, by making wise choices regarding real estate agents, real estate acquisitions, property management, accounting, tenant selection and general attitude, it is easy to minimize your chances of making money. on a scale that few other investments can afford.