Investing in real estate can be one of the most profitable investments around. Whether the investment makes you money through resale or through rental, it can be very lucrative. But it isn't without its challenges, and a big investment can also mean a big loss. However there are a few simple ways to play it smart.

Investing in real estate for re-sale is similar to how people buy stocks and bonds. There is a risk involved. This type of investment requires a good sense of timing, and also a keen eye for trends and good bargains. The goal is to buy low and sell high. Investing for resale can mean buying foreclosed properties at a discounted rate, then fixing them up or just waiting until the market is a little better, and then selling them for far more money. Oftentimes, the money earned from one sale is used to buy another property. Having fluid assets allows one to buy a deal whenever it comes up. The key to success with this investing is truly timing. As a general rule, the longer you can afford to hang on to a property, the more money you can earn when you sell it. For while the market has constant ups and downs, these are all, baring any major disasters, set within a generally constant movement upwards. So keeping your investment property for at least ten years is a good rule of thumb for earning a nice profit. That doesn't mean it can hurt you if you find yourself the owner of a super hot piece of real estate in a total sellers market. If you can make a good profit sooner, do it, but for most investments, the longer you sit, the more you'll earn.

This brings us to the next way of investing, the way that makes a real estate investment at least pay for itself, and that is renting your property. Ideally, this can earn you a good income while you wait to sell for a profit, so it can really be a win/win situation. But managing a rental isn't easy. Tenants can be a pain, and can cause your property damage. On the other hand, stable tenants will provide you with a steady income, and can even gradually improve your investment.

If you think you'd have trouble being a landlord, it is possible to hire a property manager, but this is an added expense. If you are planning to purchase a property to rent out, do your research. You need to be fully informed about your legal responsibilities. Finally, be sure to screen your tenants. While you never know a person's tendencies from one short meeting, you will be able to weed out some of the problem-types from the start. Managing a rental property isn't hard to do, it just takes keen judgment.

By researching all of your obligations carefully, and paying careful attention to the market, property investment can be an exciting and profitable venture. Finding an experienced real estate agent you can work with helps make it more reliable.

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