Investing for Beginners .EU, investing

investingforbeginners.eu A business that makes nothing but money is a poor business.
Henry Ford

Are Rich People Investing in Real Estate?

2012 Mar 2

Myths on Real Estate Investment

There are many books on real estate investing that says: if you want to be rich, then you have to invest only in real estate because all rich people are investing in real estate. Well, maybe it is true that rich people like to invest in real estate but it does not mean at all that they became rich by investing in real estate. 

 

There are many books on real estate investing that says: if you want to be rich, then you have to invest only in real estate because all rich people are investing in real estate. Well, maybe it is true that rich people like to invest in real estate but it does not mean at all that they became rich by investing in real estate. 

 

Usually rich people start to invest in real estate only when they become rich but they don’t make their wealth by investing in real estate. And to be true, it is almost impossible to get rich by investing only in real estate. Because every real estate investment requires high initial capital – you cannot just buy a real estate object in good location for $5,000. It is just not possible. Every decent real estate object requires a lot of investments. Usually the largest property objects are more profitable but they require millions or billions of investments. So if you want to get rich by investing in real estate, your chances are very low. 

 

How to Get Rich by Investing in Real Estate

Actually, I see only one possibility for that. If you have at least some capital, maybe you could find an undeveloped country of the third world where real estate properties are extremely cheap, and buy some land in good locations in there. And maybe, just maybe, after many years those land plots will be worth a lot of money. In this way many people became rich by buying land on the beaches of Egypt for pennies… However, you would face high political risk and most of the times local don’t like when foreign investors are buying their lands.

 

Why Riches Like Real Estate Investments

So, why rich people like to invest in real estate? The answer is simple: real estate is an investment that is very good in long term to protect money from inflation and generates stable cash flow. And risk level of real estate is quite decent. It does not mean that there are no similar or better investments. For example, stable dividend stocks would also generate similar and stable cash flow and could even generate higher return. And such stocks would have serious advantage against real estate investments – liquidity.

 

But there is another reason why rich people like invest in real estate. They do not care about liquidity (they always have enough of money), all they do care about is capital safety over long period. And there are some legal advantages or real estate in this field. During some kind or nationalization or other revolution situation assets can be lost. But it is always easier to recover assets in real estate form that some stocks or other assets that might be changed or depreciated too much. 

 

 

Read next article: Investment Styles of Most Famous Investors

 

 

Other articles you may like:

 

Investing in Dividend Stocks

 

Being Rich is a Lifestyle like Investing

Investing in Stocks is More Profitable

 

 





Name:
E-mail:
Text
Security Code:
(Use only capital letters and numbers. If you can not see the code, click on the image.)

You are solely responsible for all content you post to the site.
investingforbeginners.eu reserves the right to edit or delete any and all reader comments.



Investing in precious metals: Is it a good idea?Investment History 101Is investment risk high today? Are Derivative Investments Necessary For All Investors?Investing In Stocks Of Employer: Should Your or Not?How Stocks Are Reacting to the News?Are Rich People Investing in Real Estate?Investment Styles of Most Famous InvestorsPractice Is the Only Way to Investment ProHow to Invest if Don’t Know Anything about InvestmentWhen Is The Best Age For Beginning of Investing?Economy and Stock MarketRight Time to Stop InvestingSpending and Investing Balance ExtremesInvestment in Your LifeClassical and Untraditional InvestmentsIs Forex Trading Investing?How to Invest during a Recession?Investing In Stocks Of EmployerThe Best Investments for BeginnersTime Spent for InvestingInvesting in Dividend StocksInvestment Takes TimeBeing Rich is a Lifestyle like InvestingInvesting in Stocks is More ProfitableForestry InvestmentsImprove your Investment Results Together with Investment SkillsAll About Investing

Last searches: assets , profitability ratio , property , private market , strategy , ROE , private investor , profit margin , euro , days inventory outstanding , investing , investment , beginners , stocks