At times you hear people talk about the volatility of the real estate market. If you want volatility, try the Wall Street conspiracy. They’ve got volatility. Why? Because they also have liquidity. Instant liquidity. Anyone can log onto their account and buy or sell a stock with the click of a mouse.
Real estate is a cat of a different color.
It is an illiquid asset. Even if you woke up one morning determined to sell a piece of property and there was a buyer equally set on the purchase, chances are it would still take two weeks or, more likely, a month before the deal could be closed. It’s a much more complicated process. An offer must be made and accepted, financing arranged, third party inspections made, title search, etc before an official transaction can ever be made.
This lack of liquidity is a good thing when it comes to investing. It’s what makes real estate such a stable, appreciating asset. It’s also why, if you’re living paycheck to paycheck, you shouldn’t use your lunch money to buy income property. If the time comes that you need to get out of it quick, you might not be able to. Investing in real estate should be done for the long term with money you don’t need for day-to-day survival.
Then you can leave it alone and watch it grow. Use the Empowered Investor method and it will likely be quicker than you think.
Flickr / sanbeiji
