“Time” Is A Major Real Estate Wealth Growth Tool, So Use ‘IT’ And Watch

In this report I use figures from my area of the world … I know they don’t apply all over the world, but they should encourage you to get the figures for yourself.

After all no report is going to make your money grow … it’s the knowledge you gain and “Your Application Of The Knowledge” that makes your financial wealth Grow.

In another report I gave you a concept I borrowed from Phil Ruthven, a truly wonderful speaker on economics, on how he looks at Home Ownership.

Now I want to look at the Tools we have available to help us Grow!real estate wealth,

So folks, if you want Real Estate Development, you must use all the tools available to you to get some. Of all the tools you have, the single most important one is TIME.real estate wealth,

1. Time is your greatest friend. Time to buy good investment property and let it double in value every 8 to 10 years or better.real estate wealth,

2. Federal Government Real Estate Investment Tax Deductions are another tool the Government uses to tell you in Words, Dollars and Cents that they want you to get wealthy so you can look after yourself to your final days. real estate wealth,

3. Correct Financial tools are also vital to your wealth development. See my report of Finance. I will go into some further detail in this section on the use of Evergreen Lines of Credit and how they work.

4. Good Real Estate Management is the next tool. Well-managed and well-maintained real estate investments, that houses good quality tenants is also essential. Trying to do this work yourself, is a mistake. See my report on Property Management. real estate wealth,

In Australia, it has been instilled in our consciousness, that we must all own our own home. And there is nothing wrong with the concept. It’s just that we should have been told to rent it out; Don’t live in it.

By buying a house TO LIVE IN, while we are young, we are wasting the wealth creating tools of Time, Double Income, (if married) Property Income and Tax Deductions. No wonder so many people have to play catch up later in life. real estate wealth,

So the first clue to Real Estate Wealth Development is don’t buy a residential property for you and you partner to live in. You buy a house as an investment and you rent elsewhere.

Growth Tool No. 1 – Time

Time is your greatest friend. Real Estate is a long-term investment and by being loyal to it, the real estate will reward you handsomely all through your life. real estate wealth,

You can prove this to yourself, as I did, by getting the figures of average house sale prices, from the Australian Bureau of Statistics for Brisbane, the largest City in Australia.

To save you the trouble I got the figures and I painstakingly went through them in order to validate the old wives tale that, ” real estate doubles every seven years.”

Well, it does better than that, you’ll be pleased to know.

I was able to get the figures from 1973/74 to 1994/95. I think I started there because that was when I arrived in Brisbane on transfer from Melbourne. real estate wealth,

That is a twenty-two years period, during which we had several credit squeezes, a few recessions and a few good times as well.

In 1973/74 an average house price for the whole of Brisbane was $23,234.00. That average includes the best and worst house and suburb.

Seven years later, in 1980/81, it was $43,470.00 an increase of 87%.

However by the next year, the eight-year, it had risen to $56,757.00 giving an increase of 144% from 1973/74. So you see that it more than doubles by the eight year. real estate wealth,

Going on a further seven years from 80/81 to 87/88, the $43,470.00 went up to $83,679.00; a further 92%.

Interestingly, going on one more year to the eight year, it had again increased to $113,917.00 giving an increase of 162% from 1980/81.

A further seven years from 87/88 to 94/95, the price of the average house in Brisbane went up to $163,325.00; a further 95% increase.
real estate wealth,

Unfortunately the Bureau amalgamated the Shires of Logan and Caboolture into this statistical base and I could not extract the figure for the eight year.

However on the evidence of the previous 22 years I believe it is safe to assume
the increase would be at least 5% making it an increase of 100%. real estate wealth,

So these figures prove that over a period of 22 years the asset has increased by seven times its original value and all you would have to do is buy it at the beginning.

I hope this gives you some idea of why TIME is so important to growth. And remember that I am talking about average prices, I am not talking about hot inner suburbs that will obviously do much better.

If you REALLY understand these figures; you should ask yourself why you are willing to miss out on buying good real estate by stopping negotiating for the sake a few hundred or a few thousand dollars. I’ve seen this done many times because of stubborn-ness. Crazy! real estate wealth,

For goodness sake it’s the Real Estate Asset that is in short supply; not money. If you have found real estate that fits your criteria; BUY IT!

The Real Estate Development Coach

Copyright Colm Dillon, October 2003

All Rights Reserved.

Real Estate Investment – Why it is Big Business?

When examining the different asset classes, real estate is generally far less volatile than shares and real estate tends to be the haven that investors flock to when other asset classes are suffering.

It is true to say that investment properties can have many benefits in terms of building long-term wealth, but we must never forget that this wealth is not guaranteed!

Following the global real estate boom of the late 1980′s many investors learnt this hard lesson when they found their properties were worth far less than they had actually paid for them and the bottom seemingly fell out of the over-inflated market. The bottom did not truly fall out of the market however as all real estate retained value; the real estate market simply experienced an overdue rebalance and has gone on to build from this point of stability.

Since the booming 80′s ‘sensible’ investments in real estate have still offered major attractions and advantages, and it is back to real estate that investors have turned in recent years.

With real estate prices in some countries soaring, and first time buyers struggling to get onto the first rung of the real estate ladder, many people are looking further a field for investment property opportunities.

A recent report in the UK highlighted a 130% rise in the value of farmland since the 1990′s for example – fuelled entirely by a new breed of non-farming buyers. With bricks and mortar real estate prices in the UK now so exorbitant, these non-farming buyers are looking for alternatives for their money.

They may be unable to afford real-estate investments and unwilling to risk their cash on the ever volatile stock market and so they are buying up fields and pastures to get in on the real estate investment game!

Others interested in property investment have been examining the real estate markets around the globe for value for money, return on investment, potential for growth and development, rental market opportunities and basic stability. With current research showing that up to one in eight Britons intend to purchase an overseas real estate within the next five years you can see that overseas real estate investment is very big business.

Relatively newly discovered property markets are opening up or expanding in countries such as North Cyprus, South Africa and Bulgaria for example – where potential buyers are afforded incredible value for money when it comes to real estate. The real estate market in countries such as these has been artificially restricted through the threat of war or political instability, and now with their recent history showing that they are stable countries with strong economies and populated and governed by those with a first world perspective, property investors are finding markets rich in diversity and potential.

Dubai is another country offering interesting real estate investment opportunities. Since May 2002 when the crown prince of Dubai, Sheikh Mohammed bin Rashid Al Maktoom issued a decree allowing foreigners the right to buy freehold real estate there, the real estate market has exploded!

Properties available in Dubai range from modest one bedroom flats to freehold exclusive islands! And property there still offers very good value for money – furthermore the tax and business advantages in Dubai are very appealing and so real estate investment in Dubai is enjoying a buoyant upward trend.

And then there are the ‘old’ favourites – France, Florida and Spain for example are all countries with a long history of investment real estate appeal – especially for Britons and Northern European residents looking to escape the weather and invest in a home in the sun. Whether you are looking to secure a home for holidays, your retirement or you are looking for a long term investment opportunity these countries still offer the investor potential for real estate growth.

When it comes to considering real estate as an investment vehicle it is a tried and tested method used for attempting to secure long term gains – but as with any investment, gains, returns and security of investment are not guaranteed. Whether real estate investment is right for you and matches your circumstances and attitude to risk is something that you need to consider.

The Real Estate Bubble Fallacy

There has been a lot of talk lately about the “Real Estate Bubble”, and a lot of folks are asking the question: “When it is going to burst”?

They are saying that the market just can’t sustain this level of growth and appreciation much longer, and I heat them say that it is inevitable that it must come crashing down soon. People are worried. They don’t think it can last; That whatever goes up, must come down.

These folks have been conditioned to believe what they believe most likely from the experience of the stock market bubble of 2000, and maybe the 1990′s when the real estate market was hit hard in many large metropolitan areas across the country.

Its human nature to feel this way. We all know the saying (or the 80′s tune for you big hair folks), “Once Bitten, Twice Shy”. Or what about, “All good things must come to an end.”? Its how we react to almost everything that affects our well being and general safety. Its a subconscious reaction at the gut level.

Just like in the stock market, there are bulls and bears. Bulls are typically more optimistic about the market and expect it go up, and bears are generally more pessimistic and expect the market to go down. They will always be there to provide free advice and “expert consulting”. Remember though, who you decide to listen to will certainly have an effect on your decision making, and ultimately your success.

Well, I’m here to say that there is no real estate bubble! There never was a real estate bubble. Its a complete and utter fallacy.

“How can I say that?” you ask. I can say that because the real estate market is in reality, a Wave. Its a cycle, and we just happen to be riding the big swells, or the crest of this long, consistent, and fairly predictable pattern.

There is no doubt that real estate has been a rock solid investment for decades, and will continue to be for the foreseeable future and for many reasons that I would like to demonstrate here and now. Because you, as a real estate investor, must be able to move forward with confidence when deciding which projects and properties you want to buy and sell. That is the purpose of my website, www.realestateinvestment.net [http://www.realestateinvestment.net], to provide you timely information, strategies and techniques to help you succeed.

But first, what is a bubble? In terms of economics and markets, the best definition is probably something along the lines of “an isolated or ephemeral situation or condition with little support or substantiation from external conditions”.

The best example, and the one foremost in the minds of us all, is the stock market tech bubble of 1999 and 2000. We all rushed into the tech stocks and the stock market in general as we saw the .com millionaires being made.

Y2K was a big factor in the tech bubble. People were buying new systems at a unprecedented rate in order to prepare for doomsday. People were also buying consumable goods to stock up for the dreadful event that never came.

So what was holding up, or supporting the “irrational exuberance” as Alan Greenspan characterized it? Well, we learned soon afterward, not much. It was an isolated, temporary incident that had little support from the other conditions. It was indeed like a bubble that burst.

And it has had little support since then. Historically speaking, after the stock market crash of 1929 and 1987, it took decades for the market to recover, although it did eventually recover. Just look at the Dow average and the S&P average for the last hundred years and see the pattern of recovery. You can be sure that a slow steady rise for stocks is in progress.

Now back to real estate. Let me explain why this is not a bubble.

Real Estate is Cyclic

Real estate has had its ups and downs over the years, but it is generally stable, with no drastic swings per se. If you were to look at the cycles on a chart you would see a clear pattern of gently rolling swells. This pattern is consistent across cities and regions all across the United states, although slightly varied in degree.

In addition, the cycles tend to favor the ups rather than the downs. It is not uncommon to see large cycles of appreciation and much smaller downward cycles. In other words, the current double-digit growth we’ve all come to know and love in recent years will likely be followed by downturns of single digit declines. Its like taking two steps forward and one step back.

In the big picture you will still be further ahead than when you started. You may see slower growth, but it will still be growth.

Real Estate is a Basic Necessity

People need to live somewhere. They need a roof over their head and their children’s heads. Like food and clothing we must have a home. People don’t need stocks or bonds. Therefore, you can be sure that whether the market is high or low in growth, whether interest rates are up or down, people will be buying, renting, leasing, and selling homes. It is as perennial as the years.

This Real Estate Wave Has Been Around Awhile

I don’t know when you first realized we were in an up market in real estate, but it has been on a solid upward trend for at least the last 3-4 years. It didn’t just happen yesterday. Of course like anything else, awareness of the general public is a bit latent, and dependent upon the media. It has only been lately that the media has really focused on it and thrust it onto the front page.

The old adage “Success breeds success” is also true. The momentum will grow as other more traditional investors continue to jump on the band wagon and pour their money and resources into real estate investment. It tends to create a perpetual, self-feeding market that is ideal for more seasoned investors.

Real Estate is Local and Regional

It is true that even in today’s real estate boom, there are areas in the United States that are not enjoying the high rates of return that others are experiencing. California is a fantastic place to invest, so is Arizona and a host of other places.But the Rust Belt states are not as fortunate. Watch what happens to Florida home values after this horrendous hurricane season. This is because real estate is driven by the primary capitalistic force of Supply and Demand.

Generally speaking, property values increase in areas where the job market is strong, and where there are more people moving into than away from. Of course there are other factors to consider; including interest rates, availability of funding, climate, and governmental policies. These are all important and you must be cognizant of their impacts to your strategy.

However, it is true no that matter what the rates are or how nice the climate is, people will continue to migrate where there are abundant job markets and affordable housing. If you can stay just slightly ahead of that migration, you will profit immensely.

Real Estate Investing is Diverse

You can invest in so many different ways, from foreclosures and fix and flips, to buy and hold and everything in between. Right now the commercial space is relatively soft. It will recover no doubt, but people investing in single family homes are probably doing slightly better in returns. Vacancies are up and rents are down for commercial properties, but fortunately, the forecast is for this sector to improve over the next few years.

The key to successful real estate investing is to understand the forces, trends, and conditions that are driving the market. BE AWARE of your surroundings; Read articles and stay on top of industry news; Look in your own area at the job market and forecasts. Check my website www.realestateinvestment.net [http://www.realestateinvestment.net] for all the news and information you need to help you succeed in your real estate investing career.

There is no real estate bubble, but there is a real estate wave. Like any dedicated surfer, when the surf’s up, get in the water and catch a wave! But watch for danger, be flexible, and be smart. Invest wisely and you can prosper in any real estate market.

Real Estate Investing Skill Acquisition

Real estate investing is not in any list of high school electives. You can’t get an accredited degree in real estate investing. You won’t find a high school or college guidance counselor who recommends a career in real estate investing (if the guidance counselor understood real estate investing, he or she probably wouldn’t be a guidance counselor!)

The public school system and educational curriculum in the U.S. is only a feeble attempt to prepare students to just “get a job.” Unfortunately there is no class in “Making Money 101.” You don’t have the opportunity to take a class in “How to Become Financially Independent.” No teacher ever taught a class in “How to Succeed When Everyone Else is Failing.” I never learned anything about succeeding as an entrepreneur or becoming wealthy during my 10 years in the university classroom. I only became a multi-millionaire when I learned the skills of real estate investing, and I paid the price out-of-pocket and out-of-the-classroom for that education. I learned these skills in the ole University of Hard Knocks through trial-and-error.

Never disparage the cost of education. There ain’t no free lunch. You’ve gotta get this know-how outside of a classroom, and learning how to make money is gonna cost you. But if you think the cost of education is expensive, you should calculate the cost of ignorance!

However, learning real estate investing doesn’t have to cost you an arm and a leg. Yes, I know, the real estate investing TV infomercials and the real estate investing seminars held around the country charge big bucks for those 3-day seminars and week-long Boot Camps. But that’s pocket change compared to the fees they want to collect from you later. Catch this fact: all the real estate investing infomercials and seminars target you as a candidate for “real estate investing coaching.” That’s where they charge you up to $25,000 and over $50,000 per year for “coaching.” And often you are assigned to some kid “still wet behind the ears” to call you each week or month to hold your hand and whisper in your ear what common sense and a persistent drive should already tell you! I’m not exaggerating the real estate investing educational system, because I know it inside and out. I personally know many of the so-called “gurus.” I’ve been close to it for 25 years. My opinion is that the fees charged are exorbitant because the promoters have found deep pockets in the marketplace.

When I started my real estate investing career 25 years ago, real estate investing TV infomercials were unknown and real estate investing seminars were extremely rare. Back then, Mark Haroldsen followed an emerging trend started by Al Lowry and Nick Nickerson by holding occasional real estate investing seminars across the country. Later Robert Allen expanded the industry. Robert Allen promoted real estate investing conventions in the major cities across the U.S. He found a market for costly real estate investing packages of information with cassette tapes and note books. TV infomercials, expensive seminars, and outlandish coaching fees followed in subsequent years. Would-be real estate investing aspirants today who want more than an inadequate salary from a job in Dullsville often conclude that they have to “pay through the nose” for real estate investing know-how.

However, through diligent searching, these want to-bees often find that this education in real estate investing is more readily obtained from other sources than they previously imagined.

Real estate investing is probably one of the most easily learned skills never taught in school. Real estate investing is probably one of the most prolific careers available on Planet Earth. Because families now live in houses instead of caves, houses available for fix up are everywhere. And probably nothing contributes to upgrading the deplorable housing conditions across America comparable to real estate investing in fix up properties.

The entrepreneur-minded aspirant who discovers the real estate investing industry often catches a vision of life-beyond-a-job. Books and online courses offer an alternative to expensive seminars and coaching.