You may have thought about it at one point or another: purchasing a rental home, condo, or townhome, and "making the plunge" by investing in real estate. However, with all of the recent headlines and the housing downtown our country has seen, many investors have simply been scared off entirely. Today, let’s took a look at some of the benefits of investing in real estate.

First of all, when you buy rental property, realize that over time, real estate surely has gone and will continue to go up in value. Granted, the last few years have been extremely difficult with many markets seeing prices slide. However, over time, real estate has slowly but surely gone up in value. And there is no reason to believe that long term, over time, this trend will not continue. As an investor, you will be able to make money on the future appreciation of your property.

Secondly, you often times are able to make monthly cash flow. The tenant is paying you monthly rent, and that monthly rent pays off all of your expenses on the property (mortgage, taxes, and insurance.) What is left over, is simply called cash flow.

Third of all, you will be paying your loan down over time. Or should we say, your tenant will be paying down your loan for you on that property over time. Often times, borrowers are able to put a 30 year fixed rate loan on a property (and still have it cash flow.) As a result, each month, your mortgage balance is decreasing. If you put a 15 year mortgage on a property, you will even be paying it down more quickly of course.

Lastly, you are able to depreciate that rental property, thus saving you on your taxes each year. This is one of the most often time missed benefits. Depending upon the ability of an investor to qualify for these tax benefits (income, etc), the tax benefits can truly be outstanding.

In conclusion, there are four primary benefits to buying investment property (whether it be a home, townhome, condo, duplex, etc): cash flow, principal pay down, appreciation, and tax benefits. Realize that historically, investing in real estate has proven to be an awesome long term wealth building strategy. In spite of this recent real estate market and correction, there is no reason to believe things will not continue in a positive direction. There are obviously no quick solutions, but real estate investing has helped make many "average joes" from around the country into millionaires.

Ryan O’Neill is a licensed agent with RE/MAX Advantage Plus. As the founder of The Minnesota Real Estate Team, Ryan and the team help clients buy and sell Minneapolis Real Estate and Minneapolis Homes for Sale.

Article Source: ArticleSpan

Experts believe that real estate development and building will produce some trillion in revenue between now and the year 2030. Most also agree that most of that revenue will be filtered into and through the top ten megapolitan areas in the United States. This amount of revenue will completely eclipse the building boom that followed World War II and means an unprecedented amount of growth and opportunity for investor.

Megapolitan is defined as two or more existing metropolitan areas that have grown together to become one huge area and the community boundaries have become blurred. An example of one such area is from San Diego through Santa Barbara. When driving from San Diego you will pass through Oceanside, Newport Beach, Long Beach, Los Angeles, Thousand Oaks, Oxnard, Ventura and Santa Barbara. It is very difficult to tell when you leave one city and enter another. Robert Lang of Virginia Tech urban studies has theorized that two-thirds of the population will live in 10 of these Megapolitan areas by the year 2040.

Atlantic Seaboard – extends from Boston through New York, Philadelphia and Washington.

Gulf Cost Belt – Brownsville, Corpus Christi, Huston, New Orleans to Mobile.

I 85 Corridor – Birmingham, Atlanta, Charlotte, Raleigh to Durham.

Valley of the Sun – Phoenix to Tucson.

Southern – Florida Miami, Tampa to Orlando.

Southland – Los Angeles to Las Vegas.

Great Lakes Area Detroit, Chicago to Pittsburg.

North California – San Francisco to Sacramento.

I 35 Corridor – San Antonio, Austin, Dallas, Ardmore, Okalahoma City to Kansas City.

Cascadian – Eugene, Portland to Seattle.

Megapolitan Areas will have certain characteristics in common. They will combine at least two existing metropolitan areas together. Each will total more than 10 million residents by 2040. They will have similar physical environment. Have very good transportation and supporting infrastructure. Goods and services flows freely from one urban area to another. They will also require a large geographical area that is suitable for large scale regional planning.

It’s true that some of these megapolitan areas have been hit by economic troubles, but even CNN’s Money Magazine agrees that these areas are some of the best for real estate development and investment. Just why is that, and what should you look for when trying to protect your investment in these areas?

Being careful about the industries that are supporting these megapolitan areas is of course very important. Investing in areas that have relied on the automotive industry or manufacturing may not be wise. However, megapolitan areas of New York and Charlotte, North Carolina, have done very well in the past few years because their dominant industries of advertising, banking, and investing have better track records than these other industries that are not as reliable. Absolutely nothing is completely secure or 100% reliable when it comes to business and industry, but obviously one can use some common sense when it comes to investing in certain areas.

Megapolitan areas are typically more desirable for industry and new business because they already have a ready workforce and developed real estate. A company looking to build a large factory or set up an administrative office is probably not going to choose a desolate area, even though the real estate may be more affordable. There is no population in this immediate area to support their business by way of personnel, vendors, and sometimes even roads and available homes. This is one of the reasons that megapolitan areas seem to consistently and constantly appeal to established industries and companies and startup businesses as well.

If you’re looking for a solid real estate investment area, you may be attracted to more sparse areas because they are more affordable, but remember that sometimes you get what you pay for. Consider instead investing what you can in these already established megapolitan areas. By using some common sense and doing your homework, you’re sure to find that it’s the right choice.

David Cowley has created numerous articles on real estate investing. He has also created a Web Site dedicated to real estate investing. Visit Real Estate Investing

Article Source: ArticleSpan