by David Cowley

Created on: December 07, 2007

Where Should You Invest In Real Estate? Investing in real estate is one of the few ways for the average person to gain wealth. Can you become rich overnight? Not very likely. Real estate investing should be considered a long term strategy that can gain you tremendous amount of wealth over time but you must do your homework first. The majority of people that are getting into the real estate investing market are simply purchasing a home in an area that they are familiar with and then wonder why they are not rich after a couple of years.

Do a search on the internet for real estate investing and you will find hundreds of ways to get rich quick through real estate investing. And it's true, if you are selling books, DVDs or real estate seminars you can become wealthy in a short period of time. If you are investing in real estate it is just not going to happen without the proper up front research.

There are three main points you must consider before purchasing your first property and they are location, location, location. This is a rather simplistic view of real estate investing but it has never been more true than today. Thousands of people are getting into the real estate market, and yet over 90 percent of the foreclosures in the market today are from non owner occupied homes. This means that people that have purchased a vacation home or purchased a second home for investment purposes have gotten into financial trouble. This Usually happens because they did not purchase that asset in the correct location at the correct time. So the question is, how do you find the correct location to invest?

Any locations can be the correct location to invest in real estate as long as the timing is right. There are four cycles of real estate investing and the cycles can run from 7 to 40 years depending the the intelligence of the local government. These cycles are Buyers Stage 1,
Buyers Stage 2, Sellers Stage 1 and Sellers Stage 2.

Buyers Stage 1 - strategy buy and hold.

1. Oversupply of properties on the market.
2. Prices and rents are falling.
3. You will see a spike in the properties time on the market.
4. Unemployment is at its highest.
5. New construction is overpriced and sales are stagnant.
6. Construction jobs are at an all time low.
7. Foreclosures are at its highest rate.
8. Investment properties are not being purchased or being purchased at a slow rate.

Buyers stage 1 is a declining market and you will need to shop around for a good investment because you do not know how low the market

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