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Jamaica News - Real Estate - Sales (January 23, 2005)
REAL ESTATE as a means to wealth
When Investing in real estate , the right location is key like the location by Kemtek Construction in Drax Hall, Ocho Rios.

The backbone of any economy is real estate. With an investment you have to look long-term and in the long run there is nothing to beat real estate.

Some persons may disagree with those strong and emphatic comments. After all, are not these the halcyon days of the Jamaican stock market where paper millionaires are being created? Giddy investors, spurred by last year's bull run, are dashing back and forth convinced that the market is their only avenue to wealth.

If one had invested $1 million in Capital and Credit Merchant Bank's initial public offering two years ago (with an IPO price of $5), that million dollars would be worth almost $7 million today (at a share price of $33).

But those are the best case scenarios, showcasing investments in good companies. It is instructive to note that in 1995 there were about 51 listed companies on the Jamaica Stock Exchange. That figure now stands at thirty eight. Imagine if you had invested in the thirteen or so companies which have been subsequently delisted.

Investing in the stock market, it seems, is not unlike chasing shadows and dust. Not so with real estate investing.

To paraphrase well-known financial advisor, Susie Orman: One cannot live in a stock certificate. It is a simple but powerful maxim, one that savvy investors have known for years: while an investment in the stock market may provide the best investment in the long run -- and this is no guarantee wealth augmentation through real estate is the safest bet one can wager. "Everybody should invest in real estate It's the most solid investment. It's sure...it's there. It's certain."

Just ask the United States investors who are spurning the equities market, opting, instead to pay premium money for scarce lots in major urban areas (like New York) and converting them into parking lots. A recent survey in the United States in the Business Review Weekly Rich 200 found that 63 per cent of those surveyed made their wealth in real estate or had substantial portions of their wealth in real estate.

According to the website, successinproperty.com, "It is a universally held principle that if you want to retire rich on a passive income you must invest in real estate. Now, whilst this is not ground breaking news for many, what steals this dream from average people primarily is lack of education, lack of cash flow and lack of capital."

At most, stock market investment provides dividends semi-annually but with real estate there is a steady monthly income. And the returns from an investment in fixed deposits and savings accounts may not be sufficient to keep ahead of the inflation rate.

The wealth that can be made from real estate investing is best exemplified by nineteenth century mogul, John Jacob Astor. His fortune of US$20 million when he died in 1848 is equivalent to over US$80 billion today. That would make him the fourth richest American in U.S. history. Only Carnegie, Vanderbilt and Rockefeller, rank ahead of him while Bill Gates is ranked fifth.

The key to succeeding in real estate is finding the right location. Both Mrs. McEachron and Clarke advise potential investors to invest in areas such as Hope Pastures, Constant Spring Gardens, Havendale, Manor Park, Liguanea and Mona. Emphasised Mrs. Clarke, "when you are buying you have to buy wise...you have to buy long term." They advise potential investors to consult with real estate agents who have the trained eyes to identify the right property for the investor.

Most of those townhouses, especially the new ones - and those in the $25 million price range are bought for rental income." These units can command rental of anywhere from US$2,000-US$5,000 per month. But again, this is largely because of their location in the Jacks Hill and Manor Park areas.

Property prices have been going up. They  will certainly not be going down at all. The best time to purchase  is  now.

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