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From an Indian perspective - I would not take his real estate advice seriously.In India, living in a rental home is not as convenient as it is in the developed countries. For e.g., landlords would like you to move every 3 years; and if you have many belongings this could be very inconvenient. On the other hand, fully furnished rental homes are very expensive.The book also recommends accumulating commercial real estate. This too is very complicated in India when compared to developed countries.Rest of the advice in his book is relevant.

Just starting out? Here is my perspective for investing in USA. I’ve been in this now about 15 years and have learned some pretty hard lessons. Here is my feelings from my experience.Start out by researching cities with the best ROI and places where it cost more to rent than own. Typically these are going to be places where you can still buy decent single family houses for under 200k. Don’t bother looking in the dreamy places like NYC, San Fran, Honolulu.. it just doesn’t work. Stick to basic places that while not really a vacationers dream, are still decent and have a strong economy.Next;Which cities are landlord friendly? (Meaning easy to evict if you have to). The tenant friendly places should not be touched by anyone that is not already very well experienced. A quick example, I won’t invest in California again. It can be very difficult to evict a dead-beat tenant there. Texas however, it’s very easy.Next, which cities are the most tax friendly? Factor in property tax and whether you will need to report your rental income to the state, and also if you need to register and pay taxes to the city on your gross rent. Don’t ignore this one. When I was starting out, I neglected it and ended up with a house where a full 3rd of the rental income goes to property taxes. One day the mortgage may pay off, but those taxes will be there forever, taking my money whether it rented or not. So stick to tax friendly places.How much does insurance cost? For example, I have a rental in Houston that cost triple to insure than a similar house in Las Vegas. But even that is still only half of what it would cost if I were to buy somewhere in Florida.Find a couple cities you like? Which one is closer to where you actually live, or at least close enough so you can travel there regularly without too much fuss. Lately I’ve been investing in Las Vegas. There are other cities with better ROI, but Vegas is a relatively simple trip for me, and I enjoy going there anyway.Once you select a city to invest, interview a handful of property management companies within that city. You can learn a lot from them and they can help direct you to the best neighborhoods where rentals are in highest demand. If the rental firm also does sales, that’s great, but if not, you should also interview several realestate agents, hopefully ones with good investing experience. Note that there are a lot of really bad agents, so don’t settle on one right away. If you find a good one, they will do amazing things for you, and know how to get you the best deal when you come across a listing made by a bad agent. (Same goes for management companies)When looking at houses within a city, my preferences are;15–25 year old, single level 1300–1800sf, 3–4 bedroom, 2–3 bathroom, 2 car garage, on a regular lot with a driveway large enough to park a car. Maybe this is not possible all the time, but it’s my preference.Stay away from anything which is subject to an HOA. They don’t really do anything useful except tell you what color you can paint your house and fine you when your tenant forgets to put their grill away. The good ones will prevent some blight, but for all the fuss they cause and money they take, I’d rather just let my neighbor paint their house any color they want.Stay away from neighborhoods subject to special taxes (such as MUDs, Mello Roos, etc) it’s just gonna take your money.Stay away from flood zones (or disaster prone areas)Stay away from areas with a lot of vacant land and a lot of new construction (most of the time) This is an equity play, which is a bit more risky. Buying new construction likely gonna get you stuck with all those special taxes and HOAs we are trying to avoid anyway. Worse, developers fail very regularly. All the stuff they promise at the beginning may never get built. You won’t be the only investor in there and you will be competing with a lot of other vacant houses for tenants. If a large apartment building goes up near by, it could be years before you achieve a reasonable rent.Stay away from the really bad neighborhoods. Actually, stay away from the really nice ones too. If we rank things where; 1 equals skid row while 5 is Celebrities and movie stars, I like neighborhoods that rate about 2.2. Worse than that, and you may have problems finding quality tenants. But if it’s too nice, the rental income will not keep up with ownership cost. If you have enough funds to be buying into luxury houses, you might be better off getting into commercial realestate instead.Stay away from condos (most of the time) I’m gonna admit, some of my best early investments were condos. If your funds are limited, maybe a condo is your only choice, in which case still go for it. Condos are good for beginners because the HOA, will take care of a lot of the issues for you. Also, banks do a lot of research on condos for you, and won’t normally write conventional loans on the bad ones (making it a little safer for you). If you do get into a condo, only do so if single family houses are not an option, and stick to very basic condos. Avoid large buildings with things like elevators. The maintenance fees will eat you alive.I want to add one more thing. Investing is a compromise. You will never find a perfect place. I break my own rules sometimes. So think of these as guidelines. Don’t ignore a great deal just because it falls into an HOA. Try to look at the overall big picture to see if something is a worth while investment.Thats it for now. If you got this far and find it helpful, please upvote me. Thanks!

Before answering your question, it’s important to ask ourselves a few other questions first:What are the options available?What are the pros and cons of each option?How to choose the right one?In another question I talked about the different types of return a Real Estate Investor might be focusing on. I mentioned Capital Gain, Cashflow, or steady growth through a mix of the two. Now let’s drill a little deeper into that concept and discuss in general the different ways someone might invest in real estate.The Best WayThe first thing is I am not going to tell you what the best way is. Simply because the best way for me and the best way for you will be different, based on the markets we’re exposed to, our individual equity levels, and expertise.Instead we will talk about the different types of investment and what the pros and cons are for each. Hopefully then you will be equipped to make a decision around what’s best for you. It will be a shallow dive into each topic, and you can investigate each in more detail by yourself and keep an eye on my future answers here on Quora.Rental PropertiesWe’ll start with the straight-forward stuff, and gradually get more complicated.The fundamental unit of property investment is buying rental properties. But even that can be opened up into a number of different categories for the different types of properties you can purchase – residential, commercial, industrial etc. We will try to break them down and keep it simple.Residential Properties – The loans for these properties tend to be at reasonable rates, which makes the investment affordable. Also, the asset is recognizable. You don’t need to be a property valuer to understand whether it’s a good purchase or not. It’s familiar. They also represent a solid long term investment due to the general trend for residential property to appreciate in value.The leases tend to be short term, however which is a threat to cashflow, and in general these investments are not cashflow positive. It’s great if you can get it there, but generally these are long term, high touch investments. Tenants are high maintenance. They break things, and expect you to fix them, and if they lose their job, there are material legal challenges in evicting them, not to mention the risk of malicious damage if you do. The real payout comes at the end of the investment when you sell the asset and realise the capital gain.Commercial Properties: Commercial property loans are more expensive, both in rates and fees. The general investor is not going to be as familiar with the property, so they may need some expert advice to determine if it is a good investment or not. Also, most Banks will require a larger down payment to facilitate the loan.However, the leases are generally long term, 5-10 years with options usually, with rental adjustments (either by fixed amount or by market assessment) scheduled into the agreement and agreed to be both parties at the beginning. And despite the higher cost, commercial property investments are generally cashflow positive. The additional revenue allows you to comfortably engage a property manager to mitigate tenancy risk. Overall from a cashflow perspective, if you have the additional capital, an investment in a commercial property is a good choice.Mixed Use Properties: You will have seen these around. They consist of a shop on the ground floor and a unit on the top floor, or in the back. The shop owner lives and operates their business from the premises.Most Banks will consider this to be a commercial property, and will want to charge accordingly, but if you have a good mortgage broker they may be able to find an exception to that rule. The rental return is slightly better than a pure residential property, but not as good on a per square foot basis as a commercial property.The leases will be shorter as well, usually matching a residential lease, but a business owner is going to be reluctant to move so continuity is built in if the business thrives. If the business fails you can shuffle the tenant off at the end of the lease and find another one - maybe.While this seems like a solid compromise between the other two types, these properties have a limited resale market, so capital appreciation is not as good as either of the others on their own. Also, there is limited rental appeal for them as well, so vacancy risk is slightly higher.This is a reasonably specialized investment, and you would want to research the local market comprehensively before entering into a purchase like this.Unit DevelopmentAnother foundation method of property investment is unit development, and there are a number of characteristics involved in this option as well.This generally involves construction of either residential, commercial or mixed used units from a block of vacant land. The land was either vacant because you knocked down what was there previously (this is sometimes referred to as Infill Unit Development), or because a land developer has prepared it for you.The risks associated with these types of investment are mostly around timeframes, and therefore costs. You start with the vacant land and potentially a builder, but no firm timeframe around when rental income is going to become available, or when the sales will be finalised if that’s the methodology you are using. You have estimates, but it is very important you factor in cost and time contingencies when planning these projects. What happens when the builder takes too long and spends too much to complete the units?Some Banks will want pre-sales in order to provide finance, which can impact on your potential return, particularly when the market is growing. Pre-sales requires you to sell a portion of the development (for example 2 of the 4 units) before you commence construction. This way the Bank will be confident their funds will be returned. A pre-sale however is always sought at a discount.These two elements combined mean when it comes time to realize the capital gain at the end of the construction, the margins you anticipated at the outset might be compressed.Additionally if market conditions move during the course of the construction project, you can potentially be exposed to resale risk as well. You might have conservatively anticipated sales of $400,000 per unit, but due to a poor election result end up struggling to sell the units at $350,000. Your $80,000 return per unit has become $30,000 in a heartbeat and there is little you can do to mitigate this.One of the benefits of this type of investment however is the potential to mix the return method out of it. Build 4 units, sell 2 to reduce debt and rent 2 out.Land DevelopmentThis type of property investment involves taking a large parcel of land and turning it into residential or commercial lots. There is a high level of civil engineering and planning expertise required with this method. Approvals through local government can be time-consuming and will often involve unreasonable conditions (such as improving roads leading to and away from the developed area, or large areas of Public Open Space which deliver nil revenue in the long run).There are large sums of capital required to entertain this style of investment, and it is best handled in a syndicated manner, where a number of investors come together to pool their resources in support of the venture. This has the effect of spreading the risk, but also dilutes your individual return.Once again, resale risk is material, and the timeframes around when the returns become available are fluid, making it difficult to forecast project returns accurately. There can be good news stories out of this however, with a conservative plan laden with contingencies turns out to be too conservative and everyone makes more than they anticipated, but I would suggest these are rare overall.Land BankingThis is an even more basic form of property development. It involves purchasing large parcels of land and holding onto them for long periods of time. At the end of this indefinitely long period the land becomes something a Land Developer may want to purchase from you, or potentially partner with you in developing.Banks in general have a severe dislike of this type of investment. They are extremely risky and the timeframes around realization of the asset are rubbery at best, and fanciful at worst.This makes the investment highly capital intensive. With Banks being reluctant to lend against these types of assets, the down payment required is usually 60-70% of the purchase price. There is generally no revenue from the site to cover the interest repayments, so the investor will need to have another income source to manage that, or a substantial amount of additional capital that can be injected when needed.Land Banked properties can be difficult to sell if the market is not ready, and the investment needs to be considered to have a lifespan of multiple years.That being said the returns can be phenomenal if you can manage the risks. I have heard stories of a land banker who purchased a large parcel of coastal land for $10,000, and 30 years later realized it for $10,000,000.So Seriously, What’s the Best One?Like most investment strategies, being able to spread your risk is highly important, which means the best way of investing in property might well be a mix of two, three, or all of these options. Maybe buy a rental property, and a commercial property. Then some vacant land for a 4 unit development. Throw some of the return from this investment into a syndicate that is developing more land, or maybe a Land Banker waiting for an opportunity to develop in 3, 4, or 5 years.But everyone needs to start somewhere. And everyone needs something to aspire to. Maybe if you consider the different types of property investment options available you will have found something at both ends of that spectrum.