Investing in Real Estate:

Land lasts, but such sentiments of love and possessiveness may no longer endure. Real estate has now assumed the importance of an investment, which, if chosen carefully and maintained dutifully, can reap rich rewards.

And why not! Historically and the world over, investment in land or properties have provided best returns to investors. It is no surprise, therefore that some of the world's richest individuals are property owners.

Almost every family in the world has its tales of fabulous real estate opportunities that were missed or ignored by one or other of its members at some time in the past.

Consider this: In New York, flats are costing almost a hundred times than what they were 20 years ago. Office space has risen 400 times.

All isn't so gloomy. Though the prices of properties have risen, the mortgage rates are witnessing a historic low. That should be good news for any real estate investor or anybody looking to buy a new home.

US is definitely witnessing a real estate boom, with numerous residential complexes and commercial high rises sprouting up all over the place.

At the current levels, it makes much more financial sense to invest in properties at the fringes of the city or places, which are fast developing. How do you know that? Its simple buy magazines about real state developments. Read newspapers and get to know your city better. Also maintain a chart of the developments taking place in your city. If possible maintain a price chart of the prices per square feet of the land, flats - office as well as homes. This way you will understand the future trend and can invest better. The fast developing areas should be your prime target of real estate investments. There are a few areas where prices of land rise by almost 20 percent in a year.

What are the pitfalls of real estate investment?

There are pitfalls of investing in a property unlike investment in shares or gold. The prospective investor should bear in mind that while investment in property can be highly profitable; it can also prove to be quite risky. Often there are many factors that affect the value of the property accurately, and that mistake can prove to be costly.

Another potential drawback of investing in real estate is that of illiquidity. An individual who ties a large amount of his capital into a property and than has a sudden need of cash may find it difficult to sell the property and immediately convert it into cash without incurring considerable loss.

The cost of buying and selling properties are also quite substantial in view of the existing federal laws.

And it may even be more troublesome if the property is far away from the place of one's stay. The cost of commuting can be quite substantial for a person who lives in New Jersey but has a property in New York.