Let me start by saying that, sure, real estate can be a good investment. Real estate provides a hedge against inflation. And real estate often amounts to a forced saving plan. But most of the people who’ve jumped onto the real estate investment bandwagon over the last few years are going to fail. Here’s why:

Ignoring Returns on Investment

When you compare bank accounts, you know that 5% interest means more money in your pocket than 2% interest.

Similarly, you know that a mutual fund with a track record of 11% annual returns has made more money than a fund with a track record of 8% annual returns. Duh.

One picks investments and evaluates investment performance by looking at the return on the investment. This rule is true for stocks, bonds, and everything else—including real estate.

Read the rest of this entry »

Related posts

• Getting Started in Residential Real Estate Investing
• The Guide To Real Estate Investing Book – A Review
• How Do I Know I’m a Real Estate Investor?
• Commercial Real Estate – Big Profits
• What is The Secret to Flipping Real Estate