Invest in the United States: Real Estate
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Investing in real estate is a popular investment vehicle, especially in the United States. There are two main ways of pricing real estate: the median, or the mean/average, and in other occasions, the number of square feet. According to Wikipedia, "the median home price in the United States was $213,900 in the fourth quarter of 2005, meaning that half of all homes in the US were priced above $213,900, and half were priced below $213,900." The average home price in an area is the sum of all home prices in that area, divided by the number of houses.
Real estate is divided into to main types, commercial and residential. Worth over $48 trillion in developed countries, residential real estate can be classified into three types:
Single detached house or townhouse
Comes with the land; bought in "fee simple absolute," meaning all the buyer and his/her heirs own the property forever
Condominium
Apartment unit in the condominium that usually comes with water, electricity, etc; owner of a condominium unit has the title to unit he/she is renting.
Cooperative
Group which holds the ownership of the building. If an interested party buys a unit from a building owned by a cooperative, he/she gets a lease (an authorization to use the unit) and shares (in the corporation).
Commercial real estate covers a wider range of options for investing, as well as more complicated ways of dealing with them. It has three main ways by which you can profit: flip, renovation, rental. The three strategies ideally depend on your abilities: can you hunt down property and sell at a higher price eventually? Can you see yourself making your property look better than before? Or are you willing to rent out the property you acquired?
While the state laws govern entirely the transactions relating to real estate, America is not as restricting as foreign governments regarding foreigners owning real estate.
The government has helped the not-so rich individuals to try their hand at this lucrative business through Real Estate Investment Trusts (REITs), as mentioned previously in Where to Invest. For more information, visit the National Association of REITs at http://www.nareit.com
It is important to remember that in real estate, one must carefully examine the details of real estate transactions, especially when paying taxes to the IRS. Cash reserves are a must.
Plunging into the real estate business is relatively riskier than others. Lots of effort into learning the ropes, lengthier periods of waiting for returns, and high chances of physical labor, even. If you’ve enrolled in a short course on it and have really big doubts about whether you can pull it off, you might want to back out if you’re not up to it for the whole stretch. Otherwise, endure and you’ll be richly rewarded in the long run.
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