There is so much good information mixed with hype about real estate investing, that it's difficult for a new investor to focus on what's really important. The best approach is to take one step at a time, and have a good plan in place before you get your feet wet.

A good question to ask yourself is this:
What makes real estate a good investment?

A better question to ask yourself is this:
What makes real estate one of the best investments?

Ok - let's start by defining good investments.
Investments use your time, money, skills, and planning to make more money. This return on investment can either bring you a smaller amount of equity in the short term, or a larger amount of equity in the long term.

All investments involve some risk. Even when buying real estate with no down payment, you are still risking your credit scores! Good investments should be able to reasonably bring you higher returns with limited risk.

Pretty basic - yes - but using this framework, I'll start to show you why real estate can be a top-notch investment.

Leveraging your money:
Let's say you have $10,000 to spend, and you are thinking of putting your money into the bank, the stock market, or real estate. Now let's say that a one year bank CD returns 5%, the stock market has been averaging a 10% yearly return, and realestate has been averaging a 3% yearly return.

Now using simple math, let's compare the following investments:
Bank           $10,000 at 5%  rate of return =    $500 profit.
Stocks        $10,000 at 10% rate of return = $1,000 profit.
Real Estate  $10,000 at 3%  rate of return =    $300 profit.

But that's using simple math:
In reality, a $10,000 down payment on a home may be able to purchase a $200,000 home. Using this assumption you'll see that:

Real Estate $10,000 down payment = $200,000 home at 3% rate of return = $6,000 profit.

Well, that's all the time I have for today, but next time I'll continue looking at the question of why real estate is such a good investment.

By the way ....
I'm starting a real estate investment conference call, where I'll tackle different topics and have a question & answer period at the end. If anyone would be interested, please email me at: EugeneAreaHomes@yahoo.com