If there is one thing I can tell you about real estate investing is that there is a lot to eat. In this section of our blog, we will cover everything you can know about real estate investing to start your steps in real estate investment with a strong methodology based on scientific and proven theories .

We will look at the most important concepts to give you a strong foundation or the first step in real estate investing. We will look at many topics so that you have a strong understanding of the most important concepts and concepts of real estate investment and you will be able to know where you might want to start your investment journey within the real estate sector.

This series is starting from scratch to suit real estate investors. If you have experience in real estate investing, this series may be a quick review and we are happy to receive your opinions and share your experiences by commenting on the series or writing to us and to see the various sections of the site that deal with more advanced topics such as how to evaluate real estate investment opportunities To many investment scenarios as well as structuring advanced deals when it comes to investing with business partners. 

Now let’s start with the most important question: the key to everything:

Why invest in real estate?

– I’m sure you’ve heard experts talk about how stocks outperform the long term. What does not tell you is that the comparison does not meet the conditions and methods of fair comparison.

Because by analyzing stock market data from 1950 to 2009, the overall return on the stock market, given the S & P 500, is a stock basket that generally provides a good representation of the stock market, and with the analysis and adjustment of dividends for inflation, About 7% in terms of return.

Now, let’s take a simple look at Warren Buffet’s opinion. He thinks you get a return from the stock market about 6 to 7 percent. So, if your earnings average 7% a year on your investments, that’s really good. You multiply your investments every 10 years, so, for example, 40 years, you get about 15 times your investment.

That is, you can convert $ 100,000 to $ 1.5 million. But you have to know that during any shorter time frame, your revenue can be either lower or higher, depending on the performance of the markets during those years.

But, what about investing in real estate?

For real estate, we will use the Case-Schiller Housing Index. This is one of the most widely accepted indicators, and is the most respected indicator for tracking actual housing values ​​in the US housing market.

What does this indicator tell us?

Initially, we know how the indicators work. The index tracks single-unit homes and only indexes them if they are sold from owner to owner and sold at least twice. Why? Since new homes have been added, it is really difficult to measure the value of new homes until they are traded between the owners. This makes the pointer much more accurate.

In fact, there are several indicators, but we will only talk about the US national version. When we look at the national index, here is the indicator. The index is normal until January of 2000, and then it will be a hundred, okay? So here, January 2000 is 1, ie when it is normalized to 100. So, everything is compared to 2000. So if the house had sold for $ 100,000 in 2000, it was in 1970 sold at a price of $ 20 to $ 21,000, well , There is a right. So far these are the actual nominal values ​​of the homes that have been sold. But when it is adjusted according to inflation, it follows this line here. That’s what matters most to us, because it tells us about real housing appreciation, okay? The real rise in housing prices. And we see that during 2006 already, from 1970, this increase here, this current line here is actually less than 2% only. Thus, we see the downward trend here, seeing that real-estate prices have risen very little over 40 years here. From 2010 back to 1970. Why should we invest in real estate? Well, there’s a big problem with this comparison. You see, this comparison is often made when people compare stock market returns to real estate returns, but ignores some important factors. The real estate proceeds that were used in this example, I just assumed that you would buy a house, sit on it, and hope you would benefit from it only on appreciation when selling it. What does he ignore? Ignores rental income. If you have an income-generating property, the way stocks generate income through dividends, you will get higher returns. Plus, ignores the leverage effect. So when it’s done right, when investors invest in real estate, get income, and increase debt, which we’ll talk about, investors are able to get much higher returns. Much higher than one or 2% return. In fact, many investors can achieve 10, 12, and perhaps even 15% of the return through continuous investment in real estate. Invest in appropriate markets, invest during appropriate times, using the right kind of investment during the right market cycles. For investors who know what they are doing, getting strong returns from real estate is quite possible. Can they do that in stocks as well? Yes, but it is usually difficult for an average person to get this type of revenue down through the stock market more than he can by owning income generating properties. So I will show you all these important principles, and show you how to understand any part of the course we live in so you can be a smart investor and savvy in real estate as well. I do not expect any predictions about what is going to happen over the next six months, or even in the next few years. But I will tell you why I think the real estate market may see a boom in 2024. Before we close the session, I will predict the date of the next statue.

Let’s conclude our first article with that rumor that 90% of billionaires and millionaires have made their fortune from real estate. this is not true. They come from all industries. But the right thing is that many of these billionaires and billionaires will invest in real estate as a means of preserving their capital and preserving their wealth as a way to hedge against inflation. It is therefore an important investment asset class for people who have a lot of money as well as for people who want to build their wealth. We hope that this course will show you the basics you need so you can benefit from it as well. Let’s go.