Real estate is an investment plain and simple. Whether you are an individual looking to purchase your first home or the investor buying an office complex, both situations are investments. Often a home is the largest asset an individual will own during their lifetimes.
First you have the homeowner. This is where everyone will likely start out. You buy a home because you are don’t want to rent and see the advantages of property ownership. One way to look at property ownership is its forced savings. Every month you make your mortgage payment you are paying a portion towards the principal of the loan. If you remain in the property without refinancing, you will have the home paid for in 30 years. Not only will you have that money saved in your property but you will also benefit from the appreciation of the value of your property over that 30 year period.
Second you have the real estate investor. This is the big step in property ownership. Often these individuals will purchase a second property as a way to build up assets over time. Duplexes and small single family homes are excellent first time real estate investments. Your tenants will basically be covering your monthly expenses, so every month when you make the mortgage payment from the rent collected that further reduces your principal. Your rental becomes another savings account for you!