Yesterday I was having a conversation with someone about Starbucks. I made the comment that 20 years ago very few people would have considered spending $5.00 or more for a latte. She told me about someone she knew who had the chance to buy stock in Starbucks years ago, but did not take advantage of it. His comment was, "Who is going to spend over $2.00 for a cup of coffee?" We all know that Starbucks has been a great success.
If only we had 20/20 foresight when it comes to investments!
The good news is that we do. Real estate is almost always a good investment over the long term. We sometimes have real estate bubbles, but housing values almost always increase over the long term.
A safe way to invest in real estate is to purchase into a REIT, which stands for real estate investment trusts. When you invest in a REIT, your risk is much lower because you are investing in multiple housing units, not just one. If someone defaults on a mortgage on one unit the impact is minor to the owners of the REIT.
Comments(10)