The Rich are Making Big Money in Real Estate

 The over-whelming majority of America's wealthiest families have made their fortunes in real estate, according to a new study.

The survey, conducted over a two-month period before the end of 2005, indicates those surveyed made their fortunes investing in real estate. The study was conducted by Real Estate Add, which is an information driven website.

Many start out investing in single family homes, par-lay their profits into other real estate and discover wealth in investment real estate. The stock market has produced many wealthy individuals, but not like real estate. Only eleven percent of the 500 respondents surveyed said they made their fortunes in stocks or other investments.

An over-whelming majority of 83% of the Nation's wealthiest families surveyed made their wealth investing in real estate. Only 11% made their first million dollars in the stock market or other investments. The full report may be read on the Real Estate Add.com website.

Fifty-one percent bought their first few investment properties and waited long enough for the real estate market to appreciate to make substantial profits. Nearly all got financing to start. Some 92% said long term planning was the key to their success.

Only 10% indicated they made great profits by buying fixer-uppers or other properties they made repairs to and sold quickly.

Flipping properties, which is buying real estate and making either repairs to the property or taking advantage of a rapidly appreciating market without making any changes and selling them for a great profit, is the exception to the rule rather than the norm, according to the study.

Most real estate investors who are in the investment real estate market for more than 5 years, which is considered a long term investor in real estate, make their profits over more than double the initial amount they invested. That's understandable when there are real estate markets like Portland, Oregon, which has tripled in price in the last 10 years.

Other places like Destin, Florida, which is a resort real estate market and as such is leading the real estate industry growth in the second home market, has seen property values double in the past five years. The Silicon Valley, home of the high tech industry in San Jose, California has seen prices increase at even higher levels.

There are many places like that in the Nation's real estate markets from coast to coast. However, there are still some great buyers markets where there are shortages of investment real estate for tenants to rent.

Real Estate economists compare the trend to other forms of investing, but caution investors to have a long term plan to cover expenses in case there are unexpected periods of vacancy. Some investors in today's real estate market have purchased properties without sufficient funds to cover expenses in case tenants suddenly move out.

About the author:

Mike Colpitts is the publisher of Real Estate Add. com, which provides up to date real estate market information on residential real estate for all 50 states at http://RealEstateAdd.com Mike has been counseling real estate investors since 1989.

 Mike Colpitts

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