Real estate is both an interest-earning and a capital growth investment (its underlying value can increase). A real estate investment can be a lot more than the purchase of your own home. There are plenty of different types of real estate investments, including:

• Residential property. You own a property and someone else pays you rent to live in it;

• Commercial or industrial property. Again, you own it and a business pays you rent.

Relative to shares, cash and fixed interest investments, real estate is a medium risk investment potentially offering medium returns over the longer term.

Real estate investments can be used to achieve either capital growth or income, or a combination of the two.

If you invest primarily seeking growth, your investment horizon should be greater than five years. But, if you invest primarily seeking income, your investment horizon could be approximately one to two years.

WAYS TO INVEST IN REAL ESTATE

Direct - Direct investment in real estate is usually made through residential, industrial, commercial or retail properties. While there are advantages to this form of investment and potentially useful returns, it also carries certain disadvantages and risks.

Real Estate Syndications - These are investments where you join up with a number of other buyers to purchase a commercial or industrial property. These investments have proved to be high risk because they have often been in buildings that needed significant repair or had little tenant demand;

THE PROS OF INVESTING IN REAL ESTATE :

• Real Estate can provide an income stream (rent) that usually keeps ahead of inflation; and

• You can get capital growth, too, if you buy in the right area.

THE CONS OF INVESTING IN REAL ESTATE :

• You can get it wrong by buying in the wrong area. You need to be extremely careful with real estate investments, as buying in the wrong area can mean significant losses;

• You stand the risk of buying a building with design or other problems;

• The absence of a tenant can put your income stream at risk;

• To invest in real estate, you usually need fairly large amounts of money;

• The costs of buying and selling property are high when you take into account taxes, commissions and legal fees; and

• Your money is difficult to access if you need it in a hurry (you have to find a buyer), although you may be able to borrow against Real Estate investments.

INTERESTING READINGS ON PROPERTIES :

• Tax Breaks For Home Owners

• Finding Your Dream Home

• Checklist For Apartment Buyers

• Vaastu For Prosperity

• Feng Shui For Your Home

• Choosing The Right Home Loan

• Why A Home Loan Insurance

• A Guide To Home Loan Insurance

• Picking The Right Home Insurance Policy

• Finance Against Mortgage

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• Checklist For Movers