By investing, you put the money you save to work making more money and increasing your wealth. An investment is anything you acquire for future income or benefit. Investments increase by generating income (renting) or by growing (appreciating) in value. Income earned from your investments and any appreciation in the value of your investments increase your wealth.
Historically, real estate has been sold as an investment for income and long-term gain, as well as a hedge against inflation. Real estate investors actually profit from inflation because with about 30% equity, just a 3% inflationary increase in property values results in a 10% return on investment. Without even considering normal operating profits and tax benefits!
The principle of real estate investing couldn't be simpler: Buy a property that will give you optimal return on your investment (in appreciation, cash flow as a rental and ideally both) within your time horizon. Buying real estate, e.g. house, are usually long time investment. Well, it can happen that you buy real estate property and soon resell for a larger amount than you paid, but itís unusual. This way of investment gives you following: itís yours, you make all decisions, it canít bankrupt and you can use it right away, and you can resell it at any time. Real estate prices rise especially at long term. You avoid inflation. And often you earn something. For difference of other ways to save money you manage your money yourself, you donít give it anybody to work with it.
However it is not that simple. You have to be expert if you want to avoid mistakes and bad investment. There is quite a difference between various real estate properties. First you have to know that finding good real estate investing properties to "turn" is not easy. If a property shows good profit potential, it's unlikely you will be the only investor trying to close the deal. And, as second you have to be decision maker.
But, where to invest?