How To Increase The Yield On Your Investments Using Real Estate

In a market where traditional "safe" investments such as CDs, pension plans and IRA's are yielding a not-so-whopping 3-4%, many investors are taking back control of their capital and researching alternative investment strategies. But in a down economy how do you know where to put your money where it will a) give you a higher return than more traditional investments, and b) without the risk?

Real estate investment specialist and author Minh Pham who hosts an exclusive real estate investment workshop in the Washington, DC area has five tips for investing in real estate in the current economic climate.

"The number one thing you have to do is get educated," says Pham. "Number two, you’ll want to look for a substantial cushion of equity that protects your investment – that’s really important. Too many would-be real estate investors jump into something that sounds good, only to end up losing their money because they didn’t see the warning signs."

Pham, who has been nicknamed 'the Bruce Lee of real estate investing,' explains that loaning money secured by real estate will not only give you the security you want but can also offer much higher yields than traditional financial instruments. "You have to ask yourself why, despite everything that has happened in recent months with the housing market and the economy, top investors are still investing heavily in real estate? The answer is that they know some things that the average investor doesn't. They understand that real estate is never going to become obsolete, and that their investment is secured by something tangible that will always be needed to shelter human beings, unlike a dot com investment, for example, which often has no actual value in the real world. There is nothing more powerful than the roof over your head, and people will be borrowing money to house their families for the foreseeable future."

Tip number three is the age-old investment strategy of buying wholesale and selling retail, and real estate provides the perfect vehicle for such a strategy, especially in a down market. In case of an emergency, though, you'll also want to apply tip number four – make sure you can liquidate your investment if you need to. It may take months to sell a property, but if you need to get out with a reasonable notice period, you should have that option with few or no withdrawal penalties. Another thing you'll want to do – and this is tip number five – is make sure you are working with a team of experts – CPA's, attorneys, home inspectors, and other industry professionals – who have done hundreds of successful deals in the past and who have the experience necessary to steer you toward the safe deals and away from risky ventures.

"No one can retire on a 3-4% interest rate when they are used to getting 7-12 per cent or more – that doesn't even keep up with inflation. So you have to take action – but use caution. Taking a conservative approach will stand you in good stead, and above all – get educated!" urges Pham. "I guess if I had to choose the most important tip of all, it is number one – learn what the professionals are doing and how they are doing it. There is no substitute for knowledge."

Minh Pham's next real estate investing workshop will be held in the Washington DC area on March 18th, 2009. He will be giving away his Consumer Awareness Guide to attendees. To reserve a seat go to http://www.realestateinvestmentworkshop.eventbrite.com or call (888) 834-6873.

Wayne J. Porter has been a freelance writer for over 20 years and owns a newsletter-writing business, Two Cups Connect, named for his love of coffee. He has written about every subject under the sun, moon and stars, including real estate investing, health care, finance, software, gardening, adoption, the US constitution and renovating old houses.