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Many
of the richest people in the world have earned their wealth through
real estate. That's why real estate investing is touted as the
avenue to riches, but while it is estimated that 80 percent of the
world's wealth is held in real estate it is owned by a very small
percentage of the population -- less than 20 percent, according to a
new book on real estate. Lisa Vander is founder of Pacific Blue
Investments, a real estate investment advising company, and author
of The Real Guide to Making Millions through Real Estate: Start Your
Own Portfolio With as Little as $3000. Her nearly 300-page book
details how to begin the investing process. Filled with tangible
information, worksheets, and hot tips -- you have a wealth of
knowledge in one resource book. Here are some tips from the book on
what investors need. Have an understanding of the timing of the
market.
"You've got to understand how the market cycles so that you're
not disappointed or having unmet expectations when the market is
going to do what it is naturally going to do, which is go up and
down," says Vander. Have an understanding of how to analyze
real estate numbers. There are four parts of understanding the
numbers of real estate: appreciation, cash flow, loan reduction and
tax benefits and how they work together to produce a rate of return
on equity that you have in a property. "You're shifting your
mentality from an 'Oh, the property is gaining in value' which is
appreciation to how hard is the money, that I have in the property,
working for me," explains Vander. Have an understanding of the
economic environment where you hold real estate. "How diverse
is the economy that I am putting my money/capital into and what's
the likelihood of my investment being there today, tomorrow and into
the future," says Vander. She says there are six economic
indicators to consider that help to determine the health and
viability of a market where you plan to invest in real estate. They
are: mortgage interest rates; affordability indices; supply and
demand; demographic information; commercial real estate; and health
of the job market. Vander also points out that, savvy investors take
time to research both macro and micro economics when purchasing real
estate.
"Macro economics is the study of how large economic forces
impact the health and stability of an economy," writes Vander.
She says things such as: recessions/depressions; nationally based
loan interest rates; wartime; and demographics of the nation are
areas that investors should research. Micro economics is a look at
individual sectors of the economy, concentrating on local and
regional areas. Vander names the following as factors that will
affect real estate: local and regional recessions/depressions; local
or regional disasters; age; seniors; youth; diversification of the
job market; unemployment rates; affordability indices; supply and
demand; new housing starts; existing housing for sale; permits being
pulled; commercial real estate; types of vacancies. Making millions
through real estate is possible and with the help of Vander's new
book -- how to do it is no longer knowledge just for the wealthy.
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