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Real Estate as an Investment Essay

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Updated: Nov 3rd, 2021

This manuscript compares and contrasts two articles dealing with the subject of “Real Estate as an investment”. The first one is from the e-zine of About.com and is titled “Is Real Estate a Good Investment” and the second article is from The New York Times publications titled “Bucking the Tide, Real Estate Funds Rose”, published on the 12th of October, 2008. The essay tries to find out how Real Estate investments fare in the markets and how fruitful is it as a form of investment.

The first article from About.com takes an approach that guides relatively new real estate investors on how to decide on good investments in the market. The author of the article is of the view that Real estate investments are excellent investment choices. It is capable of bringing about a continuing source of income. It also has the potential to increase in worth in due course and illustrates a great investment form in terms of the cash value of the possession in the form of property or land that is bought.

The article highlights that one should significantly reflect on the aspect of acquiring a loan for buying investments in the real estate sector. This should be done before investing in a property that is bought with the intention of generating revenue by exploiting the renting option. Numerous advisors in the field are not in favor of borrowing resources for a real estate investment. The ideal option as per the author is to hoard up the cash required for the investment before engaging in the deal. The minimal requirements entail that the investor should be able to meet the expenses of maintaining the property while it is unoccupied.

The author warns that if this criterion is not met, the possession might translate into a liability instead of and wealth-generating asset. She points out that cost of taxes and leasing structure should be major considerations before engaging in real estate investments. Handling rent accounts can be outsourced to Rental companies as an option which could reduce the burden on the investors. However, this option comes with a cost of its own. Rental property should be appropriately quoted and should meet all the aforementioned outlays. In addition, a good insurance policy must be acquired. The author draws attention to the fact that in the case of buying real estate possessions to be sold off at a later time, land deeds must be scrupulously evaluated. Considering the development of the surroundings is an important factor that is likely to affect property prices in due course of time. She points out that mulling over the identified facets of real estate can help investors make appropriate investment decisions. (Caldwell, 1, 2)

In the article “Bucking the Tide, Real Estate Funds Rose”, in contrast to the first article, author Vivian Marino describes the state of the real estate investment markets. The article is embellished by plentiful data and facts. It features various interviews with working professionals presently working in the field. The author provides enough statistics on the present market conditions facilitating the reader to judge the real estate investment scenario. He brings to the notice of the reader that, the United States domestic real estate segment generated an average return of 2.3 percent for the third quarter in 2008. Nevertheless, international real estate funds suffered approximate losses of 11.3 percent and 24.1 percent, respectively. (Marino, BU20, 3) Around $672 million of fresh money was introduced into real estate funds in the course of that quarter and an outflow of roundabout $4.3 billion was recorded throughout the same time the previous year. (Marino, BU20, 3) An interviewee Andrew Gorgety, an analyst, was of the opinion that Real estate stocks were not as unstable as compared to the other financial markets. This observation was similar to the one made by the author of the first article. The author, in the article, deals with the circumstances under which REIT operates. Real Estate Investment Trust or REIT holds portfolios of commercial properties which form the much of the bunch of the fund holdings. He brings to notice that the REIT market had its own positives and negatives during the period and that REIT markets occasionally moved concurrently with the general stock market as the anguish of the markets deepened.

Concurrent with the remarks of the first article the author states that Real estate firms have been impaired by the down-looking economy and the numerous tribulations in the credit situations, making it difficult and inadvisable to secure loans to expand. Substantiating the assumption made in the first article that Real Estate investments are beneficial, the author quotes the positive observations of David B. Rodgers, a real estate analyst, in his article. According to him, the inherent strength of the elementary concept is not too appalling and the supply scenario is faring well, which is significant. However, contrasting views are also presented in the article. The perspective of previously interviewed Andrew Gorgety is a much more doubtful one. According to him, the glorious days when investors benefited from surplus returns in the previous days have become a thing of the past.

Both the articles are well written and provide key insights into the subject matter, particularly for readers who already are established or prospective real estate investors. While the first article presents the readers with the aspects involved before engaging in real estate investments, the second article provides them with the present market scenario and leaves it up to the investor to decide on the context.

Works cited

Caldwell, Miriam. Is Real Estate a Good Investment? moneyfor20s.about.com. 2009. Web.

Marino, Vivian.”Bucking the Tide, Real Estate Funds Rose.” New York Times, 2008: BU20.

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