I enjoy participating in conversations with individuals that I consider to be the elders of our society. They often speak in envious tones of times gone by when life was enjoyed to a fuller extent and the simple things were enough to get you by. Inevitably at some point during the conversation, a statement is made regarding how the area has changed over the years. I have often heard “You see all those buildings over there, none of that used to be there” or “when I moved here, I had the chance to buy all the land I wanted for $500 an acre and now that land is over $30,000 an acre.
Many individuals watch the areas that they live and work in become developed and rezoned to a higher and better use with out becoming investors in real property. They do not take advantage of the current tax advantages of home ownership that under most circumstances allow us to sell our residence every two years and have a large portion of the profits be exempt from income tax. They do not take advantage of using 1031 exchanges for investment properties that allow us to continually invest proceeds from the sale of real property and have those proceeds tax deferred. It is kind of ironic that the reason many of us currently live in the United States is because our ancestors desperately wanted the right to obtain and own real property. They gave up their lives in their countries of origin and made the arduous journey to the New World so that they and their families could realize all of the opportunities that accompany the ownership of real property. And yet many individuals today do not actively invest in real property.
Many individuals are like a deer caught in the headlights of an oncoming car. They know that they should be making a move of some kind but are unsure of the direction in which the move should be made. They hear on our evening news that the current real estate market in a downturn and decide to wait on the market to turn around. So while they are waiting for the opportune moment to participate in the perfect real estate deal, other individuals investing. These investors are less concerned about trying to have the perfect timing and concentrate more on researching and investing in properties with good potential returns. So when the market turns around, the investors are more aptly prepared to realize a gain on their investments than the people who procrastinated and then try to jump on the bandwagon of profiting in an upswing of the market.
Many successful investors realize significant advantage of diversifying their investments and include real property investments in their portfolios. One obvious advantage is that other than the creations of islands like the ones in the United Arab Emirates, no more land is being made. Also investors who have a lower tolerance for risk like knowing that their real property investments are somewhat insulated from tumultuous movements that can occur in the stock market.
Skillfully investing in real property is not an easy task. There is a lot of truth in the old saying “ If it was easy, everyone would be good at it”. One of the difficulties in investing in real property is determining the current value. As with any investment, a property is only worth what someone is willing to pay for it on a given day. Some individuals will see a $10,000 price reduction on a $300,000 property and believe that the reduction in price makes that real estate a bargain. In reality that property may still be priced considerably higher than the current market and only skilled individuals that deals with properties on a daily basis can help evaluate whether that property is a bargain deal or not.
In the current market there is a lot of choice and opportunity for real property investment. Do not choose to procrastinate on learning what opportunities exist in your area. Contact a local full service real estate agent and ask for current information on today’s opportunities and avoid having conversations in the future regarding opportunity lost.
