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The Best Investment You Can Make Is Buying A Home

Jun 24, 2008
The first step to building wealth through real estate investing is to buy your own home. Instead of making rent payments that pay off someone else's property, it makes more sense to make mortgage payments to pay off your own. This way you not only are not only investing your payments in a property, you are able to take advantage of capital gains. As you increase equity in your home, you will be able to use it to help you purchase other properties.

After purchasing your own home, the next most common step in real estate property investing is to buy a rental property. If you buy well and get a good rental return with minimal outgoings you will not only take advantage of capital gains but the rent you receive will go along way to paying your mortgage. As you gain equity in your property and pay down your mortgage, you will be in a position to purchase yet another property and repeat the process.

You need to be careful to minimize the risk by buying properties at below their market value, preferably when market prices have dropped. This is because real estate prices increase over time and if you are prepared to hold onto property, you will always make money in the long term. Unless you are wealthy, you will need to take out a mortgage to buy real estate property. A mortgage loan uses property as security for a loan on the property.

A mortgage allows you to purchase real estate with a down payment and repayment terms so that you do not have to pay the full value of the property immediately. If one decides to be delinquent on payments, foreclosure will find the neccessity for a judicial hearing that provides the borrower with certain forms of protection.

Real estate has historically offered investors far better returns than most other investment options. Current bank practices ask only for a deposit of ten percent for you to acquire property, though you must also show that you can support the monthly payments. You are in an excellent position to realize handsome profits if you purchase wisely. In fact, real estate has traditionally returned substantially more than average stock market investments over time.

If you are looking to build long term wealth and tax advantages, property investment is ideal under certain circumstances. Ask an accountant if your situation would permit you to claim any tax benefits.

Another advantage of real estate investing over stock market investing is that the prices are flexible. With real estate you can make an offer that is lower (sometimes substantially so) than the asking price. Stock market prices are set and do not allow you any room to move. As a result, you can sometimes get excellent property buys when the seller needs to sell quickly and is prepared to accept your offer.

Overall, real estate investing is profitable in the long run and sometimes even in the short term. Start small by depositing just ten percent on a property that you can afford and enlarge your property portfolio through gradual investments. If you behave conservatively and wisely, real estate investment could be a safe bet to personal wealth and retirement funding.
About the Author
The real estate guide in Mexico. If you're looking for a home we have commercial properties & houses for sale in Puebla Veracruz and another cities. Alojate.com
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