Paper or Real Estate?

This is the question of the day!

Just like the grocery store, except the big question today is, do you want to put your money in "paper," or in real estate?

Once again it appears that the old saying, " Real estate, properly purchased and unencumbered, is the safest investment!" Unencumbered?

Yes, meaning without debt, without a mortgage. Property ownership free and clear. That's why years ago it was always wise to pay off the " home mortgage."

But real estate, properly purchased and reasonably encumbered, with the " rational" and "sane" loan-to-value ratio ( 60%, 70% or 80%) is a sound, almost rock solid, long term investment.

Today, more than ever before, all of us should understand that the "income approach to value," is the only tried and true method and that "speculation," is no place for the investors.

Speculation, in my opinion, is the first cousin of gambling.

No matter what now happens on Wall Street we are still faced with the serious obstacles of unreasonably high investment property asking prices, often times caused by irrational debt service obligations and pure and simple greed.

The Wall Street readjustment we are witnessing may bring some common sense back into the investment real estate sector. I don't know if anything can help to curb greed.

Only time will tell.

Now, more than ever, is the time for positive and objective patience. We all need the wit and even wisdom to allow ample time for the financial market "dust," and "clutter" to settle down.

I'm of the opinion that, in the future we'll all see good to great investment property opportunities. The trick will be to be "adequately liquid" as to take advantage of these coming attractions.

Yes, cash, once again, will be king.