For the last year or so real estate has been getting a bad rap. Prices have been declining in many markets (although not all), and the lending industry has been adopting some tougher standards. All of these things coupled with the constant negative media attention are telling people that real estate is a bad investment and too risky. I don’t really agree with all of this and still have many reasons to like real estate, which I’ll review here over a series of posts.

First of all, let me be clear up front that I’m not talking about flipping houses here. That is a valid form of real estate investing, but not the sort that I’m interested in. I’m more concerned with netting a positive cash flow than worrying about price fluctuations and capital gains. If a property is “self-sustaining”, you won’t have to worry about a drop in value or many other concerns I hear a lot.

I want to be in control.

Many people who want to avoid risk (and therefore real estate) are perfectly content to put their money into mutual funds for various reasons such as diversification and the like. When you do this though, you’re not only at the mercy of the fund manager (who is paid no matter what by the way), but you’re also at the mercy of the board of directors and the senior leadership of every company that the fund is invested in. Said more simply… you have no control over your investment except to be in or out.

With real estate, on the other hand, you’re in complete control. You determine how much you’re going to buy a piece of property for and what the terms of the sale will be. This usually happens through negotiations with the seller, but you’re in control of your negotiations. You also make the decisions about what to do with the property once you own it to suit your purposes. You decide to whom you’re going to rent/lease the place and for what price.

The point here is that everything is up to you. Even though you will most likely take out a mortgage you still own and control the whole thing. Where else can you only put down say 10% yet control all 100%? Having this sort of control over your investments is a huge advantage for me and something that I consider when investing in anything.

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