Real Estate Riches: How to Become Rich Using Your Banker's Money (Paperback)

In simple comparisons, Dr. de Roos shows you how property investors can earn hundreds of times the returns of stock investors. He had noticed as a young man that many rich people either made or kept their money in property.

Some of the advantages over stocks include greater stability in value, ability to borrow almost all of the purchase price, tax laws that allow deducting expenses for depreciation on an appreciating asset, potential to buy below market value, possibility of making improvements that add value beyond their cost, opportunity to refinance to extract cash without selling the asset, cash income to cover carrying costs, little need for day-to-day supervision because you can hire property managers to take care of almost everything, and real estate values moving up consistently.

The drawback of real estate investing is that you will invest a lot of time getting started. For example, you will probably have to look at 100 properties to possibly buy one. If you want to earn a living from real estate investing, you will look at many thousands of properties before you will have enough invested to become inactive. During those beginning years, you can be vulnerable to problems with renting or fixing specific properties, finding time to be your own property manager before you can afford one, and setbacks during times of rising interest rates or falling property values.

Having established the potential benefits in part one, part two goes on to describe what you need to do. It begins with finding property to look at, looks at analyzing potential deals, recommends how to negotiate and submit offers, shows how to use more of other people's money and time, describes improvements you should look to make, and explains the risk of government involvement.

After reviewing Rich Dad, Poor Dad, I got lots of questions about the tax advantages of real estate investing. For people who do not understand the subject, this book won't be enough. Although it has a lot of case histories, this book doesn't do any of them in enough detail for a reader to see exactly what happens throughout the investing and ownership process.

This book also is accurate only if you pick locations where prices move up annually at a pretty consistent rate. Although one of the eight rules is be a countercyclical investor, the book needs to emphasize how much more money you make when you buy at the peak in an interest rate cycle and refinance at the bottom of the same cycle, and how the economic cycle affects pricing of property and your ability to rent it. Also, you need to take advantage of trends. With the aging of people born after World War II, this will mean a shift in where property is attractive in the decade ahead from communities where it's a good place to raise children to those where it's good to retire. There's a vague allusion to these issues in the book, but much more is needed. For example, a new factor like foreign terrorism in major U.S. cities could have a large effect on future property values in those cities.

After you read this book, think about what allows you to sleep best at night about your finances. For some, that will be part in real estate. Invest in what gives you the best return in piece of mind, as well as income!