Investing in real estate can seem a daunting, although appealing, prospect to many people. It sounds like an interesting and exciting way to make money, and you can picture yourself sitting in a cigar bar, framed by dark woods, toasting your latest profits with a fine snifter of scotch (well I know I can). But you've heard plenty of stories of people getting stuck with properties, and then there's your friend the investment banker who claims stocks far surpass real estate as investments. Real estate investment does have its good and bad points, and we're going to demystify them for you.

As the age old saying goes, if you're interested in buying a piece of real estate, you'll want to find the right location, location, location. The most important thing in real estate is location. When looking at different areas to invest in, look at nearby towns. I don't like being more than a one-and-a-half to 2 hour drive from my investment properties. Use the U.S. Census data to make sure the population is growing, along with job growth and income. I also like to review the appreciation rates for the last 5 years to make sure the area is not already overvalued. The next thing you'll do is visit the area and get a feel for the town. This is where your gut will tell you the most. Is there a decent downtown, cafés, restaurants, a library, and movie theater? The last thing to look at follows the foremost rule of economics: supply and demand. Remember your population growth figures and look through the area to see how many homes are available. Check the permits department to see how many applications have been applied for, and approved for new construction. Find out the vacancy rates for rentals, anything near to, or above 10% should raise concerns. Research what similar properties are renting for.

Some areas to consider are Spartanburg/Greenville and Rock Hill in South Carolina; and Edenton, Greenville, and Greensboro in North Carolina. Also, Beaufort County in North Carolina where the oldest town of Bath is located. Don't Forget, do your homework before investing anywhere!

Once you've found a good area, you'll need to decide what type of property to buy. I like residential income properties because everyone needs to live somewhere. A duplex is nice because you can rent out one side and live in the other. However, it has drawbacks because you'll be forced to share the yard, and live near your tenant. A single family home has drawbacks because if you lose one tenant, it's totally empty and you're losing money. Multi-family units are great because it's rare that it will be completely empty, although the more people you rent to, the more issues you'll have to deal with. I also like to find the worse house in an up and coming area. You can fix it up and resell it for a profit, or keep it to rent out. You can also buy raw land without any building on it. Raw land is great because there's no building to maintain and watch depreciate. You can subdivide it, and sell off pieces to make some quick profit. You can even rent the land to someone who wants to build a building on it. At the end of the lease, the building is yours!

If you're planning on buying residential properties and renting them out, there's no better place to do it than in a college town. Luckily, North Carolina and South Carolina are filled with blossoming college towns. Before you decide on a town, make sure the campus is made up of resident students, rather than commuters. You might look at the University of North Carolina at Wilmington and think it's a great place to buy, but a closer look will tell you most of the students commute. If 30% or less of the students enrolled can be housed on campus, it's well worth looking at. The lower the better. You will pay more for buildings near colleges, but you will also get more rent. The supply of college housing is limited due to zoning codes and the lack of available land. In the case of public schools, they usually don't have the money to build more housing. The demand is growing due to increasing enrollments of both undergraduate and graduate students. College towns are also becoming very popular with retirees, and remember, professors also need housing. Try to buy near the college, so your tenants can walk to school. Some of my favorite college towns include, Spartanburg, Greenville and Columbia in South Carolina, and Charlotte, Raleigh, Chapel Hill and Durham in North Carolina. These towns are home to the University of South Carolina at Spartanburg; Bob Jones and Furman Universities in Spartanburg and Greenville respectively; USC Columbia; the University of North Carolina at Charlotte, Durham and Chapel Hill; and North Carolina State University in Raleigh. All these areas have vibrant downtowns which cater to the universities by offering housing for the students.

Great places to invest in North Carolina and South Carolina can be found along the I-85 corridor. The cost of living is low, and the enjoyment of life is high. Real estate prices have remained more stable along I-85. Land is available along I-85 at affordable prices. Small towns along the route who have been waiting for development are seeing the benefits of living near the Interstate, with new jobs being created in everything from industry to tourism. Now is the time to buy along I-85. Atlanta is creeping north towards Charlotte, with Spartanburg and Greenville in between, and plenty of great towns to choose from. You have excellent access to the mountains of North Carolina, the beaches of South Carolina, and great cities, including Atlanta, Charlotte, Columbia, and Asheville. Combine this with a wide choice of colleges, and good public schools and you have an area that will continue to be in high demand. Read our article, "Explosive Growth in the Booming I-85 Corridor," at www.PlacesofValue.com.

Finding an undervalued home to buy as an investment is a great way to ensure a good return on your money. As I said previously, I like to buy the worse house in an up-and-coming area. The old saying is you make your profit when you buy a property, not when you sell it! One way to find "good deals" is to look for foreclosures. Go speak to the owner and try to make a deal before the lender forecloses, or wait until the lender has taken back the property and make an offer. Banks don't like to own other people's property. People who live out-of-town, but have been left a property by a deceased relative, usually want to liquidate it quickly and will take less than the market value. Attorneys are good sources of these deals. Another way to find a cheap home is to search builders' websites and look for their "spec" homes. These are homes the builders have built without an immediate buyer, and if there is a lack of demand, they are now sitting with them. Sometimes builders will overestimate demand and be eager to unload these homes at lower prices. You should also look for those new developments that are just about sold out. Big builders will discount prices on the last couple of homes, so they can move on to the next job.

Before buying any investment, make sure you've budgeted correctly. Research the closing costs you'll have to pay the bank for the loan, and the costs you'll have for home inspections. Make sure you leave room for the unexpected, which always seems to pop up in real estate. Protecting yourself from the beginning with a sound budget is the best way to ensure you have profits at the end. If real estate is right for you, it can be a great opportunity. North Carolina and South Carolina offer many towns to find great properties. Investing in real estate involves lots of patience and research, but your efforts will really pay off. Good luck!

Visit www.PlacesOfValue.com for more articles on best places in North Carolina and South Carolina, relocation made easy, top retirement communities, cost of living, and designing and building your Dream Home.

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