One of the quickest paths to financial freedom and security is through the world of real estate investing. Millionaires and even billionaires have been made on the real estate market, but what is it that they know that you dont? There are a series of common sense tips that can be given to any potential investors in the market that if followed can put you on the path to a secure income for decades to come.

One of the reasons so many people go after real estate investing is that it is less volatile than other kinds of investment. Land and buildings are the closest things we have to permanent investments in our world and they tend not to lose value over time. With the stock markets all around the world going up and down like a yo-yo, real estate investing has become a beacon of sanity in an otherwise insane world. But real estate investing isnt without its own pitfalls. The novice investor needs to know how the game works to win it.

The first step to learning about real estate is to know how much things are worth. If you are looking at a particular property in your area, you need to understand how and why things are worth what they are near there. The best way to evaluate that is to draw a circle representing a one mile radius from the property you want to buy and look at what things in that area are worth. Look at what they have been listed for, how long they take to sell, if they sell at all and what the difference is between the asking price and what the final selling price was. All these things will help you evaluate what a particular area is worth. If you find out that 85% of all the properties in your circle sat on the market too long, did not sell for the asking price and bankrupted several people, it might be an area to avoid. On the other hand, if the area is selling well, people are making money and investors are happy, that might be a place to put your money.

Some basic investing ideas that you need to keep in mind is if you are looking mostly to invest to save on your year-end tax bill, than you might want to think twice. Tax laws chance far too quickly to really use real estate investing for tax relief. Real estate investing is a longer-term investment normally, and using property investment for short term tax relief can be a mistake.

Another good tip to keep in mind is to know how much its going to cost to run your property once you buy it. Depending on what your strategy is, if you plan on simply sitting on your property with hopes to sell it back at a higher price a few years later, you need to know how much it will cost to upkeep the investment. If all you have is a plot of land, obviously the upkeep will be considerably less than if you bought an apartment building. Just the property tax load on an investment can swing the chances of making money in the wrong direction.

Author: Crack Marketing

Pyramid schemes are one of the most common forms of investment fraud pervading the net. With these, you are asked to contribute a certain amount of money, and then you are promised a return when new investors make their contribution. Eventually, the pyramid collapses when money owed to the previous investors is more than what can be raised.

Next on the list is an outright illegal practice called the pump and dump. This is when a small group of investors who hold a large number of shares in a company go around hyping the stock to the uninformed public. The resulting frenzy drives up the price of the stock, at which point the aforementioned small group of shareholders dump their shares at a high price before the general public knows that the stock is worthless. Sometimes, pump and dumpers will engage in short selling (short selling is a perfectly legal and legitimate practice, whereby you borrow stock from someone else and immediately sell it, hoping that the price of the stock will go down in the near future so that you can buy it back at a lower price and return it to the person who loaned it to you at a profit). With pump and dump short selling, the borrower sells the stock that was loaned to him and then goes around spreading bad rumors about the company to drive the stock price down so he or she can buy it back at a low price before returning the shares to the original owner.

You should also steer clear of any emails you receive about offshore investing or prime banks. Offshore companies, thanks to the internet, are no longer faced with obstacles such as direct mail or long distance telemarketing. Promises of huge returns from offshore investments are usually totally bogus. Another scam you need to be wary of involves prime banks. Prime banks are the top 50 banks in the world. Internet hucksters will ask for your money so that they can invest it in risk-free, high yield prime bank financial instruments. However, they will likely invest your money in high risk, speculative investment vehicles that have absolutely nothing to do with prime banks. Avoid prime bank solicitations like the plague.

I hope this information will help you avoid falling prey to investment scams. However, do not be afraid to invest in companies just because there is some pumping and dumping. Just because a few shareholders decide to pump up a stock for their own selfish gain, does not mean that the company is not a good investment. People have made fortunes on the stock market by investing in relatively new companies before anyone else knew about them. Those who did not invest in these companies because they thought they were pure hype lost out on a chance to make millions. Use your common sense when deciding whether or not you want to invest in a relatively unknown company. Do some research before you invest in and you should do fine.

Author: Jim Pretin