When you are establishing your personal investment strategy, you will probably consider a wide variety of opportunities and options before settling on a program that is just right for you.  Owning real estate is just one of the opportunities that you should explore.


Quite often we will find ourselves invested in real estate by default.  After all it is not all that uncommon to meet people that will tell you that the best investment that they ever made was buying their home. If, after determining your personal goals, you determine that investing in real estate just might fit into your personal wealth building plan, you will discover that you can in fact invest in any number of ways.


The easiest and most common way is to buy your own house.  You have to live somewhere, so you may as well be your own tenant and take advantage of all of the great perks of home ownership including not being taxed on your capital gain on your principal residence. If you already own your own home, and you want to increase your exposure to real estate, then you might consider any variety of options.  You could purchase a vacation home that your family will use or you may purchase a pure investment property that you intend to simply rent out.


In these examples, you own the real estate.   But you don’t have to actually have to have title to real estate to invest in it. For example, If you like the stock market, you could buy shares in a company that is directly influenced by the value of the real estate that it holds.  These types of shares would include companies where the core value of the company is directly related to their real estate activities. Examples would include; REIT’s, companies that build homes, companies that own real estate to lease and companies that own the real estate that their core business operates in.  You could invest in mortgage companies or even in mortgages themselves.  There are lots of ways to invest.



LIMITED PARTNERSHIPS


If you like the idea of owning bigger assets and sharing risk, you might want to explore buying real estate with partners. A partnership with a small number of active partners can encourage all of the partners to bring something to the table.  Imagine a partnership between a property manager, a lawyer and an accountant.  It does not take a rocket scientist to see how they can all help each other.


A partnership with a large number of partners that are not active will want to have a skilled and experienced management team in place. If you like the idea of partnerships, you will find that there are others like you that are also looking for opportunities to share the risk and rewards of investing in large well managed properties.

Harold Green
Central Showplace