Who Wants To Be a Real Estate Millionaire?

So why does Fred kick himself twice a day? Three words: real estate investment.

"I walk past this apartment building every day on my way to work," Fred says. "Two years ago, the building was for sale. They wanted $259,000. That was a good price because the property was a three-flat, and I knew that the neighborhood was gentrifying rapidly.

"I thought that I could buy the property, rent out the units and make a killing in a few years when I sold the building. One night, I woke up at 3 a.m. in a sweat and said to myself: ‘But what about all that money I'd have to borrow? And I don't know how to be a landlord!’ In the end, I decided that I just couldn't deal with the risks involved in rental properties. The building finally sold for a little less than they were asking.

"Last week, the new owner sold that same building to a developer. The deal was mentioned in the paper. The developer paid $1.2 million and is turning the units into condos. I could have made six figures on just that one deal—if I hadn't chickened out. I kick myself twice a day as I walk past that building on my way to work."

Luckily, Fred's loss can be your gain. Real estate is one of the oldest and best ways to create and maintain wealth. Over time, most real estate investments appreciate—many as much as 5 percent a year. In fact, the National Association of Realtors® recently reported that the median existing-home price should rise 6.7 percent this year to $181,500 (meanwhile, the median new-home price is expected to hit $209,600, up 7.9 percent from 2003).

With a little imagination, a few dollars and intestinal fortitude (that's guts), you too, can use real estate to create a nice shiny nest egg for your future and stash some serious cash in the bank.

If you're new to investing in real estate, first arm yourself with the basic information you need to know so you can act quickly when the time is right for you to buy.

If, like Fred, you see the potential of investing in rental properties but are intimidated by the prospect of being a landlord, demystify the task by discovering the five simple tips for successful landlording, the eight questions you should ask potential property managers, and the must-know info about insuring your rental property.

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