I am sure you understand inflation. Inflation means prices-go-up. The cost of materials, labor, and land go up. So when these things go up, automatically, prices of houses go up. Real Estate prices in the long run always go up. Only thing that changes is the amount of change each year. During periods of inflation ,greater demand and short supplies they can have a double digit growth year after year and during recession and oversupply in some areas they go down for few years ,but in the long term real estate values have been always up.

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If you purchased one house for $100,000 in real estate per year, with a rental income you can build equity of almost $400,000 in 10 years. This equity is built just with an inflation rate of only 5%. You can buy a $100000.00 with only $10000.00 down if you have good credit. So over a period of 10 yrs you only invested $100000 and before taking into consideration rental income it made you $400000.of equity.

Supply and demand interest rates and employment are the major factors that influence the price of real estate. When interest rates are high, the demand for homeownership goes down. Rents go up and rental occupancy rates increase. In contrast, when interest rates are low, homeownership demand typically increases, because more people can afford homes causing home prices to increase. Due to these factors real estate always increases in value, over the long term.

By Ashok of http://becomerichinfiveyears.blogspot.com



Investments in Real Estate: Personal Experiences – Part 3 · Tax Advantages Of Buying A House. Credit Score And Learning Financing Of Real Estate · Investments in Real Estate: Personal Experiences – Part 4 · Investments in Real Estate: Personal Experiences – Part 2 · Investments in Real Estate: Personal Experiences – Part 1 · How To Buy Real Estate – How To Buy A Home · Investments in Real Estate: Case Studies of People – Part 5 ·