Although real estate investing has to be done carefully, as has been shown dramatically lately, it is in general safe to do so. It is not at all advisable to purchase real estate via taking out a very hefty loan, on the assumption that real estate values will continue to rise. Before this most recent real estate bubble popped, there had been many others, and there are always cyclical ups and downs in real estate, even in more normal conditions. Nor can you assume that you will continue to make an income that will allow you to make the monthly payments for your loan. No matter what anyone tells you, real estate as an investment should only be considered if you have enough cash to make a large down payment and keep your loan small. If you do have the cash, an investment in real estate can be good not only because of a rise in your property’s value over time, but also because you usually can get an additional income by renting it.

The main key to successful real estate investing is to time your purchase or sale of real estate with the cycles that this market goes through. For example, right now prices are unlikely to get much lower, so it is a good time to buy. The difficulty is determining when prices are going to go down again. Although countless real estate investment gurus say otherwise, there really is no special formula allowing you to know how long a price rise will last. It is true though that historically, price peaks have come at roughly eighteen year intervals, with prices then stabilizing a while before going down. The upturns usually are more gradual than the downturns, so one can expect current prices to rise for around twelve years after remaining stable until around 2012.

But on the other hand it also could very easily last many more or fewer years. A wide variety of factors play into how long price rises last, such as how the economy is faring in general. You must be willing to tolerate a certain amount of risk. If you are very risk averse, a better strategy is to hold on to real estate for several decades without trying to catch peaks or valleys. In the long run its value is likely to go up faster than inflation, and while you have it you can be earning money from it by renting it out.