I think you’ll agree with me that real estate investment deserves a closer look when I tell you that according to many sources 90% of the world’s richest people made their fortunes from property!

So here are just five quick reasons why I think you should consider building yourself a real estate portfolio.

1) Freedom – By working to create a profitable business from your underlying property assets you can free yourself from the shackles of 9 – 5 employment where your creativity is zapped and your potential overlooked!

In this day and age those who can say that they love their job are the much envied few. For the rest of us the daily grind is simply necessary to keep a roof over our heads, feed and clothe our children and hopefully be able to afford to retire some day.

Does that sound like freedom to you?

I don’t think so!

The creation of a profitable property portfolio will allow you the freedom to make your own business decisions, to work when you wish and to manage your family’s finances more effectively.

2) Leverage – if you place a twenty thousand dollar lump sum into a bank you will earn interest on that figure alone – the interest rate will likely be poor and taxation and inflation will eat away at any gains you make.

Alternatively, by placing twenty thousand dollars into a property worth one hundred thousand dollars and using a bank’s money in the form of a mortgage to leverage up, you make will make the average annual increase on the full value of the property not just on your twenty thousand dollar investment!

3) Profit Twice – with property you can profit once in the form of regular rental income earned and you can profit twice and big time from the average price gains your property will enjoy each year.

Even during a real estate market down turn when prices stagnate or readjust your property will hold at least the majority of its value before once again attracting positive capital growth when the property market cycle begins to turn to profit again.

4) Consistent Growth – over the last fifty years real estate has doubled in value every seven years. If you average that out that means that property has grown consistently by just over ten percent a year.

5) Passive Income – As your property portfolio grows so the amount of income you generate will increase. You will not be able to stop this growth once it starts because each year your properties will go up in value and regularly you’ll be able to push up rental income!

While you retain ownership of your properties so you will retain ownership of all the income and all of the growth in underlying value – this is a passive income that you can take into retirement and hand on to your children and grandchildren when you’re gone.

A Final Word – Making an investment into real estate is just like making any other form of investment. There are associated risks and past performance is not an indicator of future potential. Furthermore this article does not constitute personal direct advice.

Rhiannon Williamson is a freelance writer whose many articles about international property investing have appeared in publications around the world. Visit her site AmberLamb to read her latest articles.

Article Source:

http://EzineArticles.com/?expert=Rhiannon_Williamson

With a $150,000-a-year job at a title insurance company, Nan Holmes thought she had an insider's view of the local real estate market when she bought a new three-bedroom home in Boise, Idaho, in 2007. Then she watched the bottom fall out of housing in California, Nevada, and Florida, precipitating a severe recession. Now the real estate crunch has hit Idaho and the rest of the Northwest, and Holmes, 55, is in trouble. The title insurance business has shrunk along with home sales; her income has fallen by half, forcing her to turn to savings. She stopped paying her mortgage in April and put the house on the market for about $145,000 less than she owes the bank. “How long will it take for the market to turn so I can just break even?” she asks.

The mortgage crisis, far from easing, is deepening in the Northwest and Midwest. With 15 million Americans out of work, home prices and consumer spending are under pressure. Another tumble in property values could push the economy back into recession, former Federal Reserve Chairman Alan Greenspan said on Aug. 1. “The numbers are exploding due to unemployment and economic displacement,” says Rick Sharga, senior vice-president for marketing at mortgage-data firm RealtyTrac in Irvine, Calif. “We will see them get a lot worse unless we see some job creation.”

Foreclosure filings rose in the second quarter in Idaho, Illinois, Utah, and Colorado compared with a year earlier. Those states all rank among the top 10 in foreclosure rates in the nation. The number of homes seized by lenders at least doubled in 19 states and more than tripled in seven, according to RealtyTrac. Nationally, initial jobless claims rose in July, and unemployment stood at 9.5 percent, near a 27-year high, Labor Dept. figures showed.

“The housing downturn started late in the Northwest, and now it's ending late,” says Mark Zandi, chief economist at Moody's Analytics (NYSE:MCO – News) in West Chester, Pa. Boise's median house price was $140,100 in the second quarter, down 34 percent from the peak of $212,800 in 2007, data from the National Association of Realtors show.

The Boise metropolitan area, home to more than a third of Idaho's 1.5 million residents, has been pummeled by housing-related construction and retail job losses. Since 2007, there have been more than 6,000 layoffs at chipmaker Micron Technology (NasdaqGS:MU – News) and grocer Albertsons, says Michael Ferguson, the state's chief economist. Idaho's jobless rate was 8.8 percent in July, up from 8.2 percent a year earlier and 2.9 percent in July 2007. “This is an off-the-chart, extreme financial event,” Ferguson says. “I wasn't around for the Depression, but in the last half-century there has been nothing like this.”

In Charter Pointe, a development built on cornfields 11 miles from downtown, more than half of the homes listed for sale are bank-owned or “underwater,” meaning the property is worth less than the mortgage. Dairy cows loiter in a nearby pen, and baling machines grind late at night.

Micron, founded in Boise in 1978 with early investors such as the late potato mogul J.R. Simplot, cut local production and 1,500 jobs last year, as semiconductor prices fell worldwide. The company has more than 5,000 full-time workers in the area, says spokesman Daniel Francisco. The chipmaker employed twice that number as recently as 2001.

The local payroll at Albertsons shrank following its 2006 buyout by companies including Eden Prairie (Minn.)-based Supervalu (NYSE:SVU – News) and Cerberus Capital Management, the New York-based private equity firm. The buyout ended seven decades of Boise ownership for the grocery chain, as well as its plans for 1,000 new hires, according to Ferguson.

The state lost 6.9 percent of its jobs from 2008 through 2009, a higher proportion than the U.S. average, and its timber industry declined 38 percent, IHS Global Insight says. Government workers and services haven't been spared. The Idaho state budget, which peaked at $3 billion in 2008, dropped by a fifth, to $2.38 billion, for the fiscal 2011 year that began on July 1. More than 200 positions were cut. Furloughs have been imposed in health and welfare, tax collection, and the attorney general's office.

The value of residential transactions in Idaho's Ada County, which includes Boise, was down 62 percent in June from the peak in 2007, multiple listings data show. Boise had the highest metro area foreclosure rate outside of California, Florida, Nevada, or Arizona in the first six months of the year, according to RealtyTrac. “The worst is over, but it's going to be a long road ahead,” says economist Steven Frable at IHS Global Insight.

TitleOne, Holmes's employer, had 175 workers in 2007 as housing boomed. It now has 80. Her loan was referred for foreclosure proceedings in July, an action that happens when a borrower is late by 90 days or more, according to her lender, Charlotte (N.C.)-based Bank of America (NYSE:BAC – News).

Holmes, a divorced mother of two, put her house on the market in June and has applied for a federal program that offers incentives to loan servicers and homeowners to complete “short sales,” in which the bank accepts less than what it is owed on the mortgage.

Holmes paid $370,000, with 100 percent financing, and is asking $225,000. Almost a third of real estate listings in her area are distressed properties, with seven months of inventory on the market in Boise at her price. “I was never raised to be in this position,” Holmes says, showing pictures of her family, as well as of the oversize sunken tub in her master bathroom. “I've tried to do everything I can think of.”

The bottom line: Turmoil in Boise, Idaho, illustrates how the housing crisis and recession have hit late and hard in the Northwest.