Buying buildings and land can be hugely profitable—or a huge headache. Meet five folks who are doing it right.
By Ellen Florian Kratz and Oliver Ryan
There’s something about real estate that captures the imagination in a way that quarterly 401(k) statements just don’t. Perhaps it’s the realness of it. Many companies that appeared in the stock pages 30 years ago no longer exist, but that old, seven-bedroom Victorian on the corner is probably still there. Even if it’s not, the land beneath it is. And chances are, it’s worth a heck of a lot more than it was back then. Real estate is “an investment vehicle that never goes out of business,” says Marty Stone, co-author of The Unofficial Guide to Real Estate Investing. “That’s as close to being a completely secure place to put your money as anything.”
Secure? With all this talk of a real estate bubble? True, certain urban markets—New York City, San Francisco—may well be overvalued, but that doesn’t mean there aren’t deals to be found. Since the late 1960s, not one year has gone by when the median existing home price in the U.S. has fallen. One reason: Real estate is a limited resource. “Buy land,” Mark Twain once said. “They’ve stopped making it.” Another advantage: leverage. If you put $30,000 down on a $300,000 property and it appreciates 3% in the first year, you’ve just notched a 30% return. That doesn’t include any rental income the property might be bringing in. How else can you make so much with so little? That’s what the five individuals and families in this story asked themselves. Some are investing in real estate on the side; some have made it their… Continue