The Advantages And Disadvantages Of Investing In Real Estate - Essay Example

The Advantages and Disadvantages of Investing In Real E Introduction World economic recession is heading to its peak. This triggers almost everyone to think of securing financial stability and to some it offers opportunity to grow financially. The world is still in balance considering that people are willing to invest and make their money grow in a profitable way. Many investments are available and of course, people will not be choosing much of those which cannot provide higher return of investment. In fact, economically speaking, it is logical that people will want even more to satisfy needs. The thought that humans are willing to grow financially, makes us establish various opportunity to develop a financially-secured investment. Is there such a thing like that? I believe there is. However, tantamount to the success of an individual in the field of investment are his or her invested efforts and generated knowledge. Today, there are many investments to choose from. The choice of one good investment is subjective or in a way, selective based on someone’s evaluative criteria. It is promising to invest in real estate, but it is still cannot be realized until someone learns to exert his or her efforts and critical analysis on related things, which are needed in order to successfully perpetuate in this kind of business. It takes extra effort to finally achieve the fruit of all endeavors. However, all exerted efforts are still subject to someone’s core skills. Just like any other investments, skills are needed to be successful in real estate investment. It is clear that knowledge and skills go together to be successful in the business of real estate. Advantages It can be actually viewed this way. The value of land does not depreciate. The law of supply and demand can actually be applied into this. Considering that the world population is increasing year by year, people are looking for resources to survive. The demand for land will increase. Land on the other hand will become a scarce resource. The higher the demands for land resource while its quantity decreases, the higher the price will become. This is one of the reasons why investing in real estate seems a good idea that somebody can carry on. In addition, as population increases, many people will be looking for homes. For those who cannot afford to buy a piece of land, the most convenient way is to look for housing for rent or affordable apartments for lease. This definitely makes investment in real estate an area of choice since a strong demand for shelter is integral to the existence of humanity. Many people are trying to invest in real estate for as mentioned, it promises good opportunity. Like any other investment, real estate is worth trying and worth for whatever effort of somebody. Knowing the fact that a return of investment is guaranteed just provided good plan of actions were actually implemented, makes somebody think of a good area of opportunity in real estate investment. In every investment, it is always crucial to look for something in return (Qualter). A good return of investment attracts investors and the real estate investment does not fail to attract one. In fact, the mere reasons why the number of investors for real estate is increasing is the fact that more people are getting convince to go for this kind of business. Real estate investing is rewarding and anyone into it can put his or her own style. Investors have the freedom to apply their own game plan. This makes real estate a challenging arena for investors. It is dynamic and never boring for everyone can apply his or her own flavor into it. Real estate investing is an art for everyone has the chance to put a piece of vibrant creativity that can dominate over other investors. Everyone has the chance to make real estate his or her cup of tea. Real estate investing is an activity that provides many advices. In fact, there are many professional advices online about real estate investment. This is to simply tell the fact that starting this business is not far from reach. I believe that a skillful sailor is tested by time which in the same way applies to real estate investment. As investor keeps on this business over time, more ideas will be generated that can contribute to skills enhancement. However, I still believe that the initial idea one can possibly have about real estate investment is crucial to his or her growth in this business. All basic ideas which can initially strengthen someone’s skills are just readily around the corner. It is never been harder find them. Real estate is not only a single entity; it consists of many aspects to deal with. The choice of what aspect to focus on depends on an individual’s freedom of choice and capability. This is to simply put it that an investor has a variety of option to choose from depending on skills and area of choice. Disadvantages Since it promises good opportunity at some point, many people are investing on real estate. The law of supply and demand can be applied to this. Prices may go down for real estate especially on housing since many are trying to offer the same product in the market. When supply is more than demand, price is directly affected at the bottom line of the business process. A logical individual will always look for things which he or she can maximize to the fullest. A smaller price for something sounds good to look at for the customers’ point of view. This somehow makes investing in real estate especially on housing a dilemma for those who are trying to work out for a good value. Another implication is that it would take time to sell a home considering that a competition is getting stronger. At some point in some cases, someone has to wait for years before such a profit will be realized. This is an additional burden for those who are trying to maximize profit and are looking forward to a fast return of investment. Certainly, with this situation at hand, this business will not make any good for those who are beating the red light and always on the go to realize a fast return of investment. Consequently, an unsold property would mean incurring additional expenses. Expenses for maintenance and tax would mean additional burden for those who are holding unsold property. On the other hand, the depreciation of value for buildings and infrastructure would mean additional profit loss for as long as the property remains unsold. The value for houses or any building establishments depreciate in value. This sounds not a good idea when investing on something. Ensuring profit is the most priority to ensure growth in business. Even if there are more professional advices available, real estate investment is still hard to learn for it requires a lot of knowledge that at some point may take time. It requires lots of knowledge such as state real estate law, federal income tax law, property management, real estate finance, real estate leasing, real estate sales, real estate appraisal, construction and securities law (Reed). Sounds very complicated, right? Conclusion These are just some of the advantages and disadvantages of investing in real estate. The decision now is for the investor to make whether to continue in this business or not. This is to simply say it that in this business, it needs someone to have a critical mind and is always willing to analyze things as they really are. There are good opportunities in real estate investment. However, these opportunities do not come by chance. Somebody has to work for them out and transform them into a whole lot of advantage. This is not going to be an easy task for it requires skills and endurance. Real estate investment is just the same with other related investments. For it to be a success, someone has to learn the art of playing the entire game plan. The good thing about this business though is that there is a clear corresponding demand. To analyze it further, an investor has still the power of price in the market at some point. However, the market itself is dynamic and the demand changes. In this regard, an investor has to be tested by time to learn necessary skills in coping up that eventually will lead to survival and perpetuation in the market arena. The decision is so tough and it is not so easy to get rich in real estate investment (Smith). However, for as long as an investor is enjoying the entire game plan, nothing will be impossible and difficult to solve in the long run. One thing that assures somebody to be successful in real estate investment is the existence of opportunities that from time to time keeps on knocking somebody’s door. The issue can be brought now to how responsive an individual in facing these opportunities. This can be misleading since an individual has to be equipped with skills. However, I am positive that for as long as there is willingness and commitment to go for real estate investments, the necessary skills are just easy to learn. Moreover, those challenges can be transformed into opportunities. Sources: Qualter, Damian. “Real Estate Investment in UK.” Street Directory. 2009. 4 June 2009 . Reed, John T. “Real estate investment basics.” JohnReed.com. 2009. 5 June 2009 . Smith, Kristie. “Advantages and Disadvantages.” KristieSmith.com. 2009. 6 June 2009 . Pictures How wide is the opportunity for real estate investment? Is there an assurance of income for everyone willing to invest in real estate? Does real estate ensure you of fast and continuing income? Does real estate ensure investors of their growth? Read More