Andrew j. McLean and Gary W. Eldred, phd



John Wiley & Sons, Inc.

Copyright © 2006 by Andrew J. McLean and Gary W. Eldred, PhD. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

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Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Library of Congress Cataloging-in-Publication Data:

McLean, Andrew James.

Investing in real estate / Andrew J. McLean and Gary W. Eldred.—5th ed.

p. cm. Includes index.

ISBN-13 978-0-471-74120-6 (pbk) ISBN-10 0-471-74120-5 (pbk) 1. Real estate investment—United States. I. Eldred, Gary W. II. Title.

HD255.M374 2005 332.63'24—dc22

Printed in the United States of America. 10 9 8 7 6 5 4 3 2 1

Author's Note

I wish to acknowledge Andrew McLean for his work on the first edition of this best-selling book. Subsequently, though, Andy withdrew from the project. Accordingly, I would like to inform readers that, as with the second, third, and fourth editions, this fifth edition remains my sole responsibility (along with my secretary Barbara Smerage and assistant Mohsen Mofid—to whom I offer my thanks and appreciation). To contact me with questions or comments, please e-mail [email protected] or phone (800) 942-9304, extension 20691. (Please include a telephone number with your e-mail.) You will also find many helpful links, additional information, and the latest investing trends at my website, garyeldred. com. And for those seeking advanced practical wealth-building skills, check out May your real estate investing bring you years of satisfaction and good fortune.

Gary W. Eldred


Prologue: Does Investing in Real Estate Still Make Sense? xxv



A Dependable and Growing Flow of Income 3

Property versus Stock 4

What about Bonds? 6

Don't Fall for the Annuity Sales Pitches 6

Are Rent Collections Dependable? 7

Why Rents Will Continue to Increase 8

From Baby Bust to Echo Boom 9

New Construction Can't Keep Pace 9

More Good News for Property Appreciation 10

But First, the Reckoning 11

The Relevance to Property Appreciation 12

The Interest Rate Kicker 14

Reason, Not Faith 17

You Can Still Win with Properties (for Now) 17

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