Frequently Asked Questions Part 2

WHAT IS REAL ESTATE INVESTING?

As savers accumulate money, which is initially in the asset form of cash on hand and later on cash in bank, they may become interested in improving the return that their money is presently making. They are aware or later on may became aware that there are other alternative asset forms into which they can convert their cash asset and make better return or for any other reason aside from the return consideration. Some of these are in the form of shares of stocks, bonds, gold, real estate and many others.


Investing in real estate is simply converting your other assets, such as cash or shares of stocks into real estate assets. The major areas of active and direct investing in real estate are

1.  Buy and Sell
  • Buy and forget and leave to heirs
  • Buy and hold and sell
  • Buy and sell quick
2.  Buy, develop and/or build and Sell

3. Buy and/or build and lease
Investing as stockholder of a real estate corporation or joining real estate syndications as a limited partner is a passive way of investing in real estate.

Financing real estate projects or lending capital to real estate investors is not real estate investing, because here, your cash asset was converted to receivables, not real estate.

Always remember the objective of investing which is to have more consumer goods after the investment period. However, as in other investments, this may not be attained because of the various risks involved in real estate investing.

NEXT TOPIC: THE RISKS OF INVESTING IN REAL ESTATE