Real estate is great because… it’s in limited supply

I love real estate.

When I first decided to take my financial future into my own hands, I took courses in online marketing, and joined a network marketing company. During that process, I also researched opening a bakery, but I tossedthat idea out quickly after realizing that I had to be in town all the time and that I had to start baking at 2 a.m. (and I am not a morning person). I looked at stock market investing and any other conceivable method of making money.

As you know, I finally decided that real estate was the place to be and was the best investment vehicle for me. Over the years, I have gone from being a private investor to being a teacher and a coach – and I love every minute of it. In fact, I have become a sort of traveling evangelizer for investing in real estate, trying to help other people see how beneficial that it can be.

That’s why all this week on my blog I will be talking about why investing in real estate is  just the best.

Today, reason one: real estate is limited.

In high school, most of us were required to take a course on economics where we learned the basics of supply and demand. Supply and demand have a complicated relationship when it comes to setting prices. Sometimes a high supply causes retailers to compete with each other and to hold sales, but just as often high supply kills demand because eventually every consumer who wants a certain items gets it.

But when it comes to real estate, there is one interesting fact: the supply is inherently limited.

Even though there are “seller’s” and “buyer’s” markets, at the end of the day there is a finite amount of real estate available to buy and sell.

That fact – that there is a limited supply of real estate – means that there will always be a demand for it. Granted, you might have trouble flipping a house in downtown Detroit or near the site of a nuclear accident, but overall the rule holds true.

And even if you are having trouble selling a parcel for the price you want, there are always options: lower your price, wait until the market improves, wait until growth raises the prices in the area, and the list goes on.

Limited supply creates and maintains demand. And until more volcanoes start creating islands in the Pacific, the supply won’t be changing anytime soon.




Leave a Comment!

You must be logged in to post a comment.