Is Real Estate a Good Investment in Today's Market?

Many people think that real estate is a great investment right now because of all the foreclosures and short sales currently on the market as well a falling home prices. This may or may not be true since are many drawbacks to buying right now.

If you are a first time home-buyer and plan on living in your home for several years then this is a good time to buy. Interest rates are at an all-time low and there are many first time buyer incentives. Although many homes are being offered as a short-sale, that does not make them a bargain. It simply means that there is more owed on the property than what they could sell for in today's market. It is important to contact a realtor to have a market analysis done to determine the resale potential of the home you are purchasing. Although determining a sale price for future real estate transactions is not completely accurate, you will be able to see the current trends.

On the other end, if you are purchasing an investment property you will need to consider a few drawbacks. You investment in real estate is not considered a liquid investment. It takes an undetermined amount of time to sell real estate so you will not be able to access your cash immediately. There are also different tax rules for real estate investment properties than there are for owner occupied property. Contact your tax adviser for complete information.