Just looking at a house will not make you rich in any way. You need to buy the house first and then see if you are able to make money out of it. One very important thing to remember is that you have the potential to make thousands of dollars in profits every time you purchase a house that someone else would love to rent or own.

Real Estate is Your Best Investment -

With more than 49-years of experience in investments, I still prefer to buy houses rather than shopping complexes or apartments. Why? Houses are definitely going to make me more money.  A common misconception within the business circles are that commercial buildings and apartments contain less work and you gain more profit. This simply is not true. I have owned both of these properties. Tenants in commercial buildings and apartments would often come and go. The property would need refurbishing as soon as the tenant leaves it. As the owner, you will have to undertake trouble finding new tenants to occupy these buildings. Apartments and commercial buildings require lots of on-going work. If a dispute should arise once you have rented out a commercial building, it will definitely cost a lot of money including lawyer's fees and other dues. Tenants of these commercial buildings have accountants and lawyers, and they can afford to drag such disputes out for a long time. Also, if you rent your building to a tenant with a "big name", you will definitely get a lower rental because they have a name and you want to entice them to rent out your building.

If by chance, your tenant should file for bankruptcy, you will have a client who doesn't pay the rent on-time or one who renegotiates for a much lower rate. If the tenant doesn't pay the rent, you can definitely hire a lawyer and sue him or her, but if they are bankrupt, you will not get paid anyway.

You will have to attract good tenants that will look-after your building and pay the rent on time. You will have to purchase a property that you can rent to someone who is not a good negotiator, and someone who would need you more than you need him or her. As a side benefit of purchasing and managing houses, you can help other people sell their houses too. A licensed Realtor in Idaho, which is where I reside, can definitely earn some extra cash by doing this. This may differ according to the state where you reside, and you can check with your own state authorities about the laws and regulations regarding selling other people's houses. First, you can rent houses to people who need a place to live. And when you decide to sell, you can help these people buy their first home. You will be able to solve a big problem of a person by purchasing a house that an owner can't afford and a house that is ruining that person's credit. You can sell that house for a profit and help a family to own their first house of their life. These are just some of the rewarding and profitable experiences in buying and selling homes.

The Issue With Most Investment Property -

Usually, the buyers of investment properties are other investors. Like you, they also want to purchase for less than the property is worth and with a low down payment. Unfortunately, most banks will lend only 60-70% of the total selling amount.  For this reason, the buyer will not have enough for the down payment, and the deal could very well fall apart. If not, the seller must agree to finance part of the price. Investment property can experience large increases and decreases in value as the economy changes. An empty office building or commercial building can sell for a small fraction of what it costs to build it. A well-located house will appreciate at a greater rate than an average property. It may not suffer dramatic drops in value that are common to commercial properties during business recessions.

Homes are Different -

The value of commercial buildings and apartments will depend on the amount of income it produces. If you lease an apartment for below the market rate, it will be worth less money in no time. But a vacant home will have the same value as an occupied home.

Investing in houses is safer for several reasons. First, there is less money involved since you can buy a house with a small down payment. The less risk you will have because of this. Lenders will finance more for a house than any other real estate. Next, there are more buyers for houses than there are for bigger properties. You can sell a house in a hurry, if offered at a competitive price. Third, the house could be rented faster and with fewer vacancies. Apartment vacancies often would run 10-20% while house vacancies rarely exceed 5%. Commercial properties can sit empty for months and years at a time between tenants.

Dealing with an Anxious Seller -

When you buy a house, you are mostly dealing with a homeowner who is in a hurry to sell. If the homeowner is in a hurry to sell, you can get the house for a lower rate than usual. This is a great bargain on your part. The lesson is to never sell in a hurry even if you decide to buy a house that is sold on a hurry by someone else. Your negotiation experience will count a lot when buying and selling houses. You should be able to negotiate better than the other person when buying or selling houses.